“The worst daddy ever?”

“You’re the worst daddy ever!!” said Benjy after hearing I had been in Paris watching football without him.

I was shocked and tempted to tell him off for being rude and start launching counterarguments.

Instead, I smiled and took a moment to get some perspective.

With perspective I could see that his case was overstated and he might just be having a bad day and so we set about ordering the commemorative t-shirt (an all-time favourite) and mug.

The key thing was not reacting immediately, to allow perspective in, to avoid escalating the situation.

And so it is with investing – there are some really bad days. For the US stock market, Monday 5 August was a bad one, as you can see below. Actually, it was the end of a three-day tantrum that started on Thursday 1 August:

That sort of stock market behaviour tempts many to act rashly, to wade in and make matters worse for themselves. But, with a bit of perspective (looking at the longer-term view), we can see that these tantrums come along fairly frequently. Here is the last 5 years for the US stock market:

This five-year perspective features several tantrums but also very healthy growth. To get the growth you have to withstand the tantrums.

Perspective can do that for you, hitting the panic button almost surely won’t.