Don’t Jump!


I’m not a big amusement park kind of guy.

Growing up on rural Ontario there weren’t many opportunities to go and ride the big coasters.   Just about every small town has a fall fair but the rides there aren’t much to get excited about.

The bigger cities have their annual fairs too but getting to the city, paying the entrance fees and battling the crowds for a few minutes of excitement on a rickety, temporary structure, never appealed to me. And making the day long journey to the permanent establishment outside of Toronto was an even bigger ordeal.  As a result, I was probably 19 or 20 years old before I got on a roller-coaster for the first time. I enjoyed myself but I can’t say I loved it.

Here’s my take on roller-coasters:

Drive 3 hours, pay lots of money, stand in line for 40 minutes, get your guts tossed every which way for 2 minutes, stand up, get vertigo, repeat.

That, for a lot of people, is called having a good time. I don’t get it.

Even with my limited exposure to amusement parks though I do know one thing. Once you’re strapped in, don’t try and get off until the attendant comes by and tells you to. When it comes to investing the rules are the same. If there is one thing I repeat to my clients more than anything it’s this:

The only people who get hurt on a roller-coaster are the people who jump off.

This past week has been terrible for investors. Both the DOW and the TSX have erased almost all of the gains they made in the first half of the year. It’s as if the roller-coaster peaked in mid May and has been in free fall ever since. (Not quite but close enough for this analogy)

I know it’s a bit scary but all good roller-coasters have an element of fear associated with them. Just do yourself a favor, don’t jump off.  Don’t jump off now especially while prices are falling, just like jumping off a plummeting roller-coaster, if you do that you’re practically guaranteed to get hurt. Stay the course and ride it out. We won’t be in free fall forever. Granted, we might not climb all the way back up to the top, and if we do, we certainly won’t stay there.  Over time things do have a way of recovering, just like all roller-coasters have a way of returning to the station quietly and calmly.

Stay the course, in the end you have a pretty good chance of getting where you want to go.  Sometimes it can be one hell of a ride though.  Sit back and enjoy it.


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