On Oct. 19, 1987, the previously roaring stock market came crashing down. Thirty-one years later, the markets are wobbling in uncomfortably familiar ways. Whether you've gone in on investing or you're waiting for your chance to jump, things might look pretty nerve-wracking right now. But at least you're not the guy who just lost 75 grand in 12 days.
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That being said, that guy is actually feeling okay — and according to a recent opinion piece he published in Business Insider, he's not panicking either.
Ramit Sethi publishes books and blog posts with titles like I Will Teach You to Be Rich. Like anyone ever caught in a big financial wipeout, his stomach definitely sank when he saw the dip in his holdings. But overall, he's confident he'll be fine, thanks to some smart attitudes and keeping his cool.
"The way we think about investments is totally backward," he writes. "When the price of toothpaste or gas drops, everyone is happy and buys more. But when the price of investments — likes stocks or houses — drops, everyone flips out and starts thinking of selling … Lower prices are good as long as you have a long-term goal."
Warren Buffett believes you only need three qualities to be a good investor, and none of them involve math or Wolf of Wall Street-style killer instincts. And as Sethi points out, just staying in the game when it comes to stocks is pretty much guaranteed to pay off. "[A]s long as you've diversified your investments, the stock market returns, on average, approximately 8 percent after inflation," he writes. In fact, he recommends automating investments and then only checking in on them once or twice a year. Your nerves may be able to take it better than minute-by-minute tumult. Read his whole piece for a full look at Sethi's reasoning.