Keep your head...

It always amazes me when some event happens—like the Ukraine—that it causes investors to dump stocks one day and then buy them the next. I think we have forgotten what owning stocks, or investments that own stocks, is really all about.

When you own a stock, you are part-owner of a business. How well your stock ownership does over time will largely reflect the profitability of that business over time. Do you think the owner of your local dry cleaners or pizzeria sold his business because of something that happened in the Ukraine? Of course not; then why should you?

I’m not saying that macro events like this are not important and should not be weighed (even if the Ukraine has the Gross Domestic Product of just Oklahoma). Only that it should not be the overriding concern. Consider why you own a stock before reacting to world events. Better yet, take a deep breath…investors usually are poorly served by impulsive reactions.