Great independent investors know how to create opportunities out of crises! Here’s how…

Wednesday: The Independent Investor FROM THE DESK OF MILES EVERSON: In the previous week, we talked about how you can prepare for inevitable “disasters” in the stock market. We also discussed the origins of the Bull and Bear markets and how you can train yourself to recognize such patterns. But what if the inevitable comes such as recessions, pandemics, stock market declines, etc.? Will you still know how to create opportunities out of these unforeseen crises? If you’re not sure, then it’s time to come up with a plan. And we can help. Keep reading to know how you can turn crises into opportunities with the help of this investing discipline. CEO, MBO Partners Chairman of the Advisory Board, The I Institute

Great independent investors know how to create opportunities out of crises! Here’s how… American investor, money manager, and philanthropist Shelby C. Davis once said, “You make the most of your money in a bear market, you just don’t realize it at the time.” Do you agree with this statement? According to Davis, it’s during these bear markets that big opportunities arise. However, almost everyone in these times is in fear or simply out of touch with the opportunity. As an independent investor, you have to be able to see those opportunities when this stock market pattern happens. In the book, “Investing Disciplines of the Giants,” it is said that the bear market creates the greatest opportunities. These only come around every 7 to 15 years and the possibilities are financially amazing! You wouldn’t want to miss out on these things! Here’s why Davis said a bear market is good: “Out of crisis comes opportunity… a down market lets you buy more shares in great companies at favorable prices. If you know what you’re doing, you’ll make most of your money from these periods.” This means if you’re able to buy at the bottom of the stock market, you’ll be able to sit back, with passive index funds, and enjoy great returns. For example: Those who’ve invested in simple US index funds in 2009 have seen their funds rise as much as 300% in 2019! See? This is just one out of the many instances that show that it’s possible to create and maximize opportunities in a bear market or in a crisis. In the words of Warren Buffett, “A market downturn doesn’t bother us. It is an opportunity to increase our ownership of great companies with great management at good prices.” Just as Spiderman said that with great power comes great responsibility, then you must also remember that in investing, with crisis comes opportunity. Even better than that? Disciplined investors wait for those opportunities and take advantage of them once they show up! When everyone else is fearful about their investments, stand firm and be courageous. Don’t let your fear paralyze you. Take note that one of the investing disciplines we mentioned in our past article is controlling your emotions. Apply that in such stock market scenarios. Will this pattern happen again? OF COURSE! There is nothing new on Wall Street. Whatever happens in the stock market has happened before and will definitely happen again. So, don’t worry too much about it and just keep yourself prepared. Hope you’ve found this week’s insights interesting and helpful. Follow us on LinkedIn. Stay tuned for next Wednesday’s The Independent Investor! Learn more about positioning yourself when you’re in the middle of a bull or bear market on next week’s The Independent Investor!