Yesterday’s stock market bounce may very well be a “dead cat” bounce. In other words, just a pause in the action. The market today looks a little bit soft, but it was nice to see some return to a level of optimism. Perhaps this was misplaced, but that’s the way the market operates.

The point I would like to raise is how this affected my behaviour. What I mean is this. I went from pessimism (woe is me, why didn’t I buy the index and some safer ETFs) to why can’t I buy more stocks or gold. It’s the same old story, trying to time the market.

This kind of behaviour is a type of mental “whiplash”. It shows a lack of conviction in my principles, which are poorly defined. Again, this leads back to a well-developed Investment Policy Statement. Always back to first principles. And getting away from that in whatever I do is dangerous.

The Investment Policy Statement is the basic document that will allow me to keep my focus and avoid bouncing all over the place. Today, I will spend the day developing, refining, and concluding it.