4 Useful Quotes to Help You Cope with Bear Markets

One of my favorite financial podcasts would be Motley Fool Money

Motley Fool Money is a weekly podcast by my colleagues in the U.S. and the content of the podcast typically involves individual stocks, investing, and the stock market in general.

When there are good lessons or quotes to share which are applicable for Singapore’s context, I rarely hesitate to pass them right along.

With Singapore’s stock market – as represented by the Straits Times Index (SGX: ^STI) – flirting with bear market territory, I’d like to share lessons from one podcast which dealt with how one can cope with bear markets.

In a previous article, I had covered two useful quotes. Here are the next two – equally – useful quotes.

3. “The big opportunity is seeing the disconnect between strong operational performance and herd mentality that are just pushing down share prices”

The first two quotes talked about the need to avoid being swept away by the emotions that come with a bear market. This third quote gives us insight on how we might want to act during bear markets. A steep drop in the stock market may feel unpleasant for your portfolio, but it is also the time when bargains may appear.

Discerning a real bargain is key – and how we can do that is to look at the operational performance of the company.

If the business is performing well, but the herd mentality (market participants in a bear market) is pushing down the share price of the company, then such a situation may point to an eventual winning stock that has been unfairly punished in the midst of a bear market.

4. The fourth quote is summed up in the tweets below:

If you shop at a supermarket, you probably wouldn’t like it if the price of your groceries kept changing by the second while you look at the goods. Most would prefer to know a fixed price for the groceries. That single price information would be enough to make a decision on whether the groceries on offer are cost competitive or not.

This can apply to shares as well.

There is precious little that we can learn about a stock from its daily price. As such, as the tweet notes, we may be better off looking just once at share prices when it is not moving around.

If you have enjoyed the quotes above, have a listen to the podcast while you go for a jog or when you are mopping the floor. It may be well worth your time spent.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn't own shares in any company mentioned.