How I (best) handled a stock market panic

This article originally appeared on Dividend Titan's Weekly Wealth (Free Email Newsletter)

It’s normal to feel lousy about your stocks.

Shares fall, you check your phone to see the red losses. Your money is much lower than before.

You feel bad. It’s normal.

But Don't Let Your Emotions Take Over You

The “voices'' in your head will start screaming loudly at you -- telling you to sell. Then you’ll listen to them, instead of using objective, logical analysis.

I’ve made my living in the investing business since 2010. And I can tell you, people in the industry would sell you whatever it’s popular.

And good investment ideas are never popular.

Think about how unpopular stocks were during Black Monday, 1987. Think about how stocks were unpopular during the global financial crisis, 2008. Think about how stocks were unpopular last year, during the COVID-19 outbreak.

Yet, many investors still let financial news, the “voices” in their heads tell them what to do.

When the market goes up, investors believe it’s telling them to buy.

When the market goes down, it’s telling them to sell.

If you ask me, that’s a bad way to invest. And I wouldn’t approach investing like that.

As an investor, don’t let the market tell us what to do.

Instead, we should take advantage of the market's offers to buy and sell stocks at different prices.

I Almost Gave Up

In 2015, I started accumulating one of the biggest sellers of instant mix coffee in Russia. It was a Singapore stock.

At that time, its business had solid fundamentals -- soaring sales, growing earnings and had steady positive free cash flow.

But as the Russian-Ukraine crisis unfolded, its currency, the ruble crashed. Shares I had bought in this instant coffee seller sank.

At one point, I was already down 23% on the stock. And the stock wouldn't stop sliding.

It was painful. Like any normal person, I was scared. I wished I could hide my head under the pillow and cry.

Was I wrong this time?

The “voice” dominated my head, telling me what I should do. Telling me I should sell.

_"Willie, I’m not sure you should even hold onto this stock. It’s risky.” _one of my investing friends exclaimed.

I had huge doubts. I almost wanted to sell everything and give up.

There weren't financial websites at that time. You have virtually zero information about the stock.

I could only rely on my due diligence.

Then I realized I was panicking without reason. I knew I had what it takes.

That I always believed good research triumphs bad emotions. I decided to stop panicking.

I picked myself up, and decided to have a chat with the company's management.

I Decided to Stay Focused, Instead of Just Feeling Terrible

I was greeted into a huge meeting room. Shelves were displayed with snacks and instant coffee products.

The smell of stale wood of the table and side cupboards filled the air. You could sense hardly a soul had ever used the meeting room.

Then, a guy walked in.

He was the founder of the company.

With a pen and notebook in my hand, we spoke at length.

_“...Willie, we have more than enough cash. We are even squeezing our distributors for early payment. And more supermarkets are buying our products than ever before." _He said.

My fears subsided. I scooped up more shares. And I waited.

In 2016, shares began climbing back.

In two short years, the stock went from 20.5 cents and more than doubled to 57 cents per share.

I sold off for a tidy profit.

You see, investing isn’t about making great predictions, or calling the next crisis.

It’s almost impossible to time these things.

I believe investing is about doing research, being patient, picking great businesses.

And buying them when they are cheap.

But more importantly, don’t panic. Don’t abandon the discipline of buying great businesses when they are cheap.

When you’re feeling lousy about your stocks, this is what you need to know.

And as long as you commit to grow your wealth in the long term, in retirement -- 10, 20 or even 30 years -- a falling market shouldn’t cause you anxiety.

Sometimes, investing can be simple.

Always here for you,

Willie Keng, CFA

Founder, Dividend Titan

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