The siren song of the “big picture” still invades our mind… inflation will be here for years! Europe will be dark this winter! Sell everything! But wait, meme stocks are back! Inflation has peaked and will be going down quickly! Buy everything!

That chatter sneaks inside our ears, and we can’t help but hear it and be emotionally impacted by the dire despair and/or unstoppable wealth that’s just around the corner. But we can at least avoid acting on it. That’s the great gift of having a plan and knowing what you own, it can give you the confidence to be patient and mostly sit still when you feel like the market is screaming at you to DO SOMETHING. For most of us, most of the time, action is the enemy of returns. The more you do, the worse you do.

I don’t personally see the market as super-appealing right now, I’m worried that earnings are going to suffer with inflation for the next few quarters, and we’re still at historically high valuations for most stocks and most sectors… but that doesn’t mean I’m selling everything, it mostly just means that I’m trying to be a bit more cautious with my future expectations. Which means I will likely be a little more patient in adding to my existing positions, and start smaller when making new investments.

I expect the best companies to recover well from inflation and the other issues they’re facing right now, over time, and I’ll continue to look out for buying opportunities among the “compounder” companies that I think can build into something bigger, but after the recent bounce-back in the markets there are fewer companies that look genuinely cheap to me. If we get a real crash or an extended bear market and things begin to get dramatically more appealing, which is still a long way away for most stocks I’ve looked at, I hope to have a decent slug of cash to put to work.

Until then, I’ll remind myself that I don’t know and can’t know with any certainty whether or when we’ll have a crash or an extended bear market… so I’ll keep nibbling at the companies that are at appealing valuations, adding new positions from time to time as ideas rise to the level of deserving a bit of cash, and occasionally selling some positions as I learn that I ...