The Stock Market is Crashing

What does Costco have to do with the current stock market collapse?

Read time: 3 minutes

If you haven’t looked at your stock portfolio recently, you might want to avert your eyes.

The market is having a full-blown panic attack.

Companies like NVIDIA, everyone’s favorite stock of the year, are down almost 20% this month alone.

And many fear there’s more to come.

How should you react? Should you sell before things get worse? Buy gold? Crypto? 

Laugh at everyone else because you don’t own any stocks anyway?

In less than 3 minutes I’ll share how I’m reacting (and how you probably should too), and how a shopping trip to Costco can make you a better investor.

In today’s issue:

• Why my wife scares me

• How that makes her a great investor

• How I’m planning to benefit from the recent stock crash

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Why my wife scare me

On Sunday, I asked my wife if we could go to Costco.

I love it there.

A super cheap food court, free samples given to you by sweet old ladies, and a store that looks like it was designed by an engineer, not some fancy interior designer. Maximum utility.  No fluffy displays, just orange steel racks. Such beauty!

As I prance down the aisles of this magical place, I usually find a product I like and throw it in our cart.

My wife, however, is always there to stop me.

“That goes on sale next month.”

“What?”

“Those almonds. They’re going to be on sale next month. Put them back.”

“How could you possibly know? Are you on a text thread with the CEO? You don’t know.”

“Costco puts the same things on sale the same month every year.”

“How do you memorize that?!?”

She’s a freak of nature.

Which is cool (and also slightly terrifying), but what does that have to do with stock investing?

We’ve seen this before

What my wife knows about Costco is that regularly throughout the year they run sales.

Most of the time we buy at full price, but every so often, we can hit a big discount and load up on our favorite things.

Right now, the stock market is on discount.

This happens all the time, and right now happens to be one of those times.

On average, the stock market will drop by at least 10% every 1-2 years.

It drops by at least 20% every 5 years.

That means everything that is happening right now is as normal as a Costco monthly sale.

It FEELS scary because the flashing numbers on your screen are saying you’re losing money, but in reality, you haven’t lost anything.

You still own the same number of shares in the same companies, and unless you panic sell, you really haven’t been harmed at all.

If you buy a Costco jar of M&Ms for $15 and next week it’s on sale for $12, do you say “Oh noooo I lost money”?

Of course not! You probably load up on a few more jars of M&Ms!

That’s the same mindset you should have with the stock market right now.

It’s definitely not a time to panic sell, and it might be a good time to buy a little extra.

But wait.

What if it falls further?

Shouldn’t you wait to buy until the sell-off is over and stocks have bottomed out?

Let’s think about this with another shopping example:

Imagine you find a t-shirt you love at Target. Best of all, it’s on clearance! 20% off.

Do you gamble and wait a few weeks for it to be 50% off, even though it might get sold and you lose your chance?

Or do you buy it now and enjoy the savings of a good deal?

Personally, I always prefer action. 

The person who waits for a further pullback usually misses the bottom waiting for it to go down even more (ask me how I know). 

If I wanted to invest anyway, I'd buy now.

*There is no guarantee that the market will recover from current levels. Historically it always has, but the risk of that is left up to you. Invest at your own risk, yada yada yada don’t sue me this is just an educational article and not personal advice, as always.

Keep growing,

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