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Stocks, Fear, and... Tuna?

June 4, 2018

 

Americans used to love tuna. I don’t know when canned tuna fell out of favor, but that’s not the point of this story. Imagine if every time you bought groceries you purchased a few cans of tuna. One day, you went to the grocery store and saw the huge SALE signs in the tuna aisle. It’s your lucky day, because the store has placed tuna on sale and reduced the price 50%.


What would you do?


If your family enjoyed tuna, you would probably buy a whole bunch of extra cans because you never know when tuna will go on sale again. Like all shoppers, you want a bargain.
Well, why don’t we do that with the stock market? Whenever the stock market goes down and investments are on sale, people close their wallets, shake their heads and say “no, no, no – I’m not going to invest until the stock market turns around.” No, no, no – I’m not going to buy this tuna on sale until the price goes back up?!?!


Every one of us loves to score a deal. Investments are the only thing I can think of where we are scared to get a deal. So, when is the best time to invest your money? My standard answer is whenever you have money to invest, but especially when the stock market is down and investments are on sale.

 

My friend Rashad from Parsonex Financial Services shared this story with me when the market "plummeted" from its all-time highs earlier this year. It's relevant and emphasizes the irrationality that I discussed in a previous article

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