What I do to keep my head cool in a market onslaught
Markets are down. As a domain investor, at least you’re diversified.
Unless you’re a short seller, the past couple of months have probably been brutal for your investment portfolio. While the plunge weights on my psyche, I like to put it in perspective:
You’ve got diversity – If you read Domain Name Wire, odds are you have diversified investments. You aren’t just holding stocks or crypto; you also own domain names. When the markets crashed due to Covid, a private equity firm I invest with sent a note to clients with an important message: yes, the stock market is down. But you invest with us so that not all of your assets are in the stock market. You invest for diversification. And I would think people into domain investing are more diversified than others.
You didn’t buy at the top – Well, I hope not. Put this downturn in perspective. Yeah, so the stock markets are in bear territory. But the S&P 500 is only down to where it was at the start of last year. So unless you moved all of your cash into stocks over the past 18 months, you’re doing OK. While the same holds for bitcoin, I’m afraid many people just got into that (and other crypto assets) over the past year.
Remember that it might not be the bottom – Where’s the bottom? I’ve invested by catching plenty of falling knives over the years. Don’t assume we’re there. But for assets that have been around for a while, there will be a bottom, and there will be a rise again in the future. Stocks are a good bet in the long term. They are ownership of companies. And as long as you own a diversified group of them, you’ll be in good shape in the long run. I don’t know what I’d say about crypto and NFTs. It depends on if the “late money” comes back into them and if you believe they are actually part of a technological or financial paradigm shift, not just a tulip bubble.
Everything’s going to be alright – Scott Galloway repeats the mantra that things are rarely as good or as bad as they seem. It’s hard to think that way in the moment, but it’s true.
On this week’s podcast, I talk about what’s happening in the markets and how it could impact domain investors.
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