You Can Look Back and Learn

Many of my investments took quite a beating during March. Those with weak stomachs and poor investment discipline ran for the exits. They were more than afraid, they were terrified. Terrified people often make incredibly poor decisions. One of my positions is a REIT with the ticker symbol ABR. (WARNING: This is NOT a recommendation to buy ABR, it is an illustration.)

If I sold yesterday, I would have missed out on a today’s changes. This is from earlier today.

Don’t misunderstand me, I am not suggesting that all fear is bad. But fear that drives hasty decisions related to investments is usually irrational. You act and then think. Let me suggest that it is better to think and then act. If you have a crystal ball and know exactly what tomorrow will bring, you are in the minority. (If you are one of those people, then you also need to have your head examined. God is not pleased by those who try to divine the future outside of what God has already revealed about the future.)

NOTE: ABR is a small-cap mortgage REIT, so it is not for the average investor.

If I had sold my ABR shares yesterday, I might have saved myself from further losses. On the other hand, if I bought ABR because it fit my risk profile and my overall portfolio goals, then to sell in a panic is folly.

Note what happened to LADR, ACRE and BXMT earlier today.

Again, I am not recommending these positions. This is an illustration of why I don’t panic when the stock market quakes arrive.