How do you deal with market fatigue?
Earlier this year, I switched my strategy to more of a dca to take the stress out of timing the market, and make my investing a bit more automated, as life was getting busier and I had less time to devote to stocks. But recently, I have been depositing my money and not purchasing, partially because I expect more short term pain and I'm tired of lighting money on fire, but also partially market fatigue.

It just feels like we spend too much time debating macro factors, inflation, consumer pressures, supply chain inefficiencies, etc, and it seems like execution of the individual company is irrelevant. For example, I thought $LULU knocked their earnings out of the park, and they were up post earnings, but gave back most of it because the overall market was red. It's discouraging and exhausting to actively invest when it feels like individual performance doesn't matter and I guess I've just been feeling a bit burnt out with my whole process, and I don't know if anyone else is feeling this and how they deal with it.
Invested Thought's avatar
I’ve found when I get fatigued it helps to put more focus on areas outside of the market. Exercise more, spend more time with family, etc. and the relative importance of the weekly and monthly changes becomes less, provided you are invested in businesses you like for the long haul.
Capisce Capital's avatar
@investedthought yep, I've noticed myself checking less and caring less (which is probably a good thing for most of my holdings!) definitely try to enjoy as much time with the family as I can, appreciate the tips 😁
Giuliano's avatar
I was feeling the same thing through April/May/june. I got off Twitter and every platform for a month and it was actually extremely helpful. I know it's a common advice but getting off financial medias can help a lot since that's probably where negativity is showing.
Regarding individual holdings, it just sucks, the same thing happened to me in several stocks. It's just the way it goes I suppose. Price action is quite difficult to ignore but going back to the earnings report always help me.
Capisce Capital's avatar
@giuliano_mana honestly getting off Twitter would probably do a world of good, or at least clearing my personal Twitter of the fintwit accounts and following them under this handle, but I think I may be too addicted to the platform lol
Scoreboard Investor's avatar
I understand these feelings. Like @giuliano_mana mentioned below, separating from social media and outside influences helps.

I used to get caught up in the rush and whir of Twitter recommendations. After a few failed experiments, I found that it was important for me to build my own plan and strategy. As far as buys go, I have a target cash position. When I hit my target cash position, I buy. It is usually only a share at a time.

It isn't timing the market, it isn't DCA - it is my ability to contribute that determines my buying schedule. Knowing this is my plan has helped me manage the fatigue and burnout. I have fallen in love with the process.
Capisce Capital's avatar
@scorebdinvestor you already know I admire your process! I don't have a 401k through work anymore, so my paycheck contributions go directly to a taxable account, which probably leads to a bit of this fatigue - every two weeks, I've got to figure out what to add, and lately the answer has been nothing. Not that there's anything wrong with it, but I've been considering buying some indices until I can confidently stock pick again. Buy the handful of names I do like, and then an index so at least the cash is invested (I prefer as little active cash as possible to prevent a dumb/fomo trade)
Ben's avatar
Company execution is irrelevant over the short term.

Stock price = earnings / share x PE

The PE, price someone is willing to pay, changes every day, week, month, year based on many factors both company specific and macro related.

Focus on a company which is increasing its earnings or decreasing its share count. Then buy when it’s a good value (low “relative” PE). Not low PE as in only but when a PE is <10. But when that PE is a good value relative to the company fundamentals.

Use you example $LULU
2018 net income 257 mil
TTM net income 1.1 bil
2018 share count 135.4 mil
TTM share count 127.5 mil
2018 EPS $1.90
TTM EPS $8.57

image

2018 PE 40-49
TTM PE 45 currently

The PE you pay varies for a hundred reasons. Macro, micro, and company specific revenue growth, margins, moat etc

But at the end of the day $LULU stock price went up bc earnings went up and share count went down despite about the same PE multiple.

image
Now whether you are happy with $LULU price movement is which multiples you paid. If you bought in fall 2021 with a multiple of 70, probably unhappy. But if you bought a premium business at a premium multiple (40) then sat one your hands you have almost a 5 bagger.

The last sentiment about how you think the market has father to fall is what will keep people up at night. Bc like me and everyone else, we don’t know. The market had a bear bear market in 2018. Down 19%. You can see the little blip in the chart from 150-100. Sure everyone wants to buy at 100. But if the market is down and you got lulu then at 120. You won’t be sad today.

So that long winded answer of how I handle the market is ignore macro, find good businesses, but when the market gives me a good price.

My example of this for me is $TREX. Been watching since 2019. Love the business. Turning sawdust and waste plastic into deck boards. But couldn’t pay 40-60 a PE for that business with its level of growth. Which it has had from 2019 to early 2022. But now it’s PE is 20. I’ll probably start a position.

Note the reason the PE is lower IS bc the macro is worse. But as long as you know the business will be okay and it will get through this tough time and the next. And management will work to increase earnings and decrease share count in 5 and 10 years. That’s all you can do. Bc you cannot predict what the PE will be in 5 or 10 years.
Capisce Capital's avatar
@rpinvestments ironic that you brought up $TREX, as I've been adding to that position myself lately! Management seems to have a clear strategy, seems to be executing, and the valuation has gotten reasonable, or at least "more reasonable" compared to what it was. But I appreciate the long winded answer, and am happy that I actually timed my lulu purchases pretty well, looking at that chart. I tend to be impatient and/or give in to fomo, but I've added very slowly at what I think has been good prices. That's probably a good strategy for how I should be managing the whole portfolio, it'd give me a lot less stress and fatigue haha
Chris's avatar
Capisce Capital's avatar
@etfs I definitely need to do more of this haha the pandemic and working from home has been great in most aspects, but bad for my step count🤣
Conor Mac's avatar
Pay less attention to the stock market, its the greatest distraction to investing. Lululemon had a great quarter, that's all you really need to take away, whatever the market does in the days, weeks, or even months after, is mostly noise.

There is no shame in retreating and paying less attention to macro, the news, et al. Investors tend to have this complex where they feel they have to know everything, be on top of the current events, etc, to have their edge and to feel smart. The reality is that these people spend their years absorbing 95% of useless information.

Boil it down to what matters, check up on your companies quarterly, and enjoy life.
Capisce Capital's avatar
@investmenttalk I really think that's what it is, that I'm just consuming noise, and letting that get to me. Positions like LULU are ones that I do just as you suggested, check quarterly, make sure it's still performing, and move on. Some, like PLTR, require a bit more of my attention, because "execution" is a mixed bag right now, but the macro environment and fear mongering of today will likely have little impact on their 2026 performance, for example. It's just hard to tune out the noise sometimes
Conor Mac's avatar
@capisce_capital Yea it totally varies. Starbucks, for example, I really just check in on once every three months, and occasionally read some news items.

For smaller caps, or more execution-focussed positions, I check a little more often. There is so much noise out there, it can be good to step back for a bit and remind yourself that investing can be an insulated activity when you want it to be.
Joey Hirendernath's avatar
Hi Nick thanks for sharing your thoughts on Market Fatigue.

My approach to dealing with this has been a passive one. I like to consistently DCA on companies that I have conviction in and gradually add to Indexes. I find that there are too many voices guiding the narrative. Focusing on the current macro factors often seems draining to me, while I like to stay informed I definitely think it's definitely a balancing exercise to zoom out.

I don't think I have the know-how to accurately time entry and exit so I keep my life simple by consistently adding to the positions I believe have the best potential for long-term success. And I can guarantee you are not alone in feeling Market Fatigue its reassuring to know someone else is having the same thoughts.
Capisce Capital's avatar
@joeyhirendernath I had my mind made up to dca, and then when all of your stocks go down, you start to question your research and conviction, and then you find yourself trying to "strategically" dca, despite no technical analysis skills and the fact that timing the market puts the stress back into investing that you tried to alleviate by dca in the first place! It's a vicious cycle I've been in the past few months haha but I'm glad my post resonated with you as well! Hopefully 2023 is more prosperous for all of us
Rihard Jarc's avatar
I think it's more healthy to zoom out and not to focus on daily market movements or macro news. The key ones are CPI report & the FED. Everything else probably just noise right now and no need to overly focus. But yeah given that the selloff has been lasting for quite some time now, I think most investors feel the fatigue, so you are definitely not alone. My advice is when things seem hectic try to zoom out and slow every down, take your time to think act etc. It's a principle best athletes apply when they are in a competition(slow things down in their mind).
Capisce Capital's avatar
@rihardjarc being relatively new to active investing has made it a bit harder to zoom out, but I have found myself checking my account less frequently which is probably very good in the long run. When I zoom out, I just try to think: is this company still going to be around in 2026? Will they be doing more or less business? If it's more, I buy, if its less, I question why I own 😅but I appreciate the advice!! Something I definitely need to work on
Rihard Jarc's avatar
@capisce_capital your welcome Looking less at the stock price is definitely a good start :)

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