Hi Tom,

Great question and one every investor should consider.
Here are a few suggestions that may assist you in your investing journey, as investing is a journey, not a one-stop shop.
1. The big picture (macro-economics). Share markets are guided by the bond markets (think interest rates). The current market set-up is being driven by macro-economic factors (the bond markets and the interest rate settings of Central Banks, like the RBA in Australia & the Federal Reserve in the US). The main concern is high inflation, and to curb inflation the CBs are rising interest rates. Higher interest rates and high inflation (particularly food and energy), means most people have less money to spend on discretionary items (clothes, eating out, etc). This means that demand in our economy will probably slow (possibly recession) and ultimately inflation will fall.
2. The slowing economy impacts on the companies that are listed (shares) because they may not be able to make so much money. Lower earnings, equals a lower share price, hence why shares are falling. Investors are worried that the companies they own will make less money and that means the value of the share is higher. Rising interest rates also impact on share market valuations, lower rates equal higher PER valuations and vice versa when interest rates rise.
3. As an investor you should aim to know the companies that you invest in well, so that when the price falls you can be confident that the company will be ok once the economic cycle turns (i.e. when the CBs move from raising interest rates to lower interest rates). The problem is that not all companies survive the economic cycle (sometimes). Did you see that Revlon in the US has filled for bankruptcy?
4. In falling markets, it is not always wise to just keep adding to the shares (contrary to what some experts say). Did you know NAB, ANZ and WBC share prices are still lower than 2007 & the peak of 2015?
5. Ensuring you know your companies and their financial strength

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Hey Tom….I am definitley not a financial adviser but all I can suggest is research, research and more research.

If it helps, I constantly listen to podcasts such as The Australian Finance Podcast & The Australian Investors Podcast which are both hosted by Owen from Rask & also check out his website which has heaps of free courses: https://www.rask.com.au/

Other podcasts: Equity Mates & Morningstar Investing Compass (also check out Morningstars website as well……its free or you can pay a yearly fee…..I pay the fee as I am constantly trying to learn).

The 3 mentioned above also have channels on Youtube which again I highly recommend.

Books: Prob the most easiest read is «Motivated Money» by Peter Thornhill which is great for a beginner. Moving up from that is «The Intelligent Investor» & «The Little Book Of Common Sense Investing». There is also «Top Stocks» from Martin Roth which I have been buying for a touch over 15 year (showing my age). Heaps more but I will leave it at that.

Your mind is a sponge….just soak it all up :)

All the best and I’m sure a couple of more educated experts other than a dodgy plumber will have better input :)

Hi Tom. It’s important to note that you haven’t done anything wrong. Ups and downs are a completely normal (and healthy) part of markets and just something we have to deal with as investors.

You hit the nail on the head – we’re best served by focusing on the long term and continue adding to our investments whenever we can afford to. I think of it this way: if we believe our investments are going to provide income and be worth more in 30 years than they are today, then it’s really helpful to build our investments at lower prices like we have to day. So while anything can happen in the next year or two, simply tuning out and focusing on the bigger picture is the healthiest approach.

In terms of actions, sticking to the plan is key. Maybe even finding ways to save even more so you can grow your portfolio faster. The reality is, during the first 5-10 years of our investing, how much money we invest will drive our progress more than our investment returns. It’s also the thing we can control the most, making it easier and more helpful to focus on. Hope that’s useful!