With the help of Lisa Simpson and Paul Anka, you too can free yourself of stock market anxiety in times of turmoil. In one Halloween episode of The Simpsons, giant advertising spokesmen come to life to wreak havoc on Springfield, but Lisa discovers the simple solution to stopping them: Just don’t look! The same bit of advice applies to your dwindling portfolio when the giant bear comes to life. Look away and the market loses its ability to dictate your emotions.  

You are more than your net worth

I track my net worth every month as an exercise in personal finance that often serves to remind myself that I’m on the right path, and I am a huge proponent of doing so. In actually, I see the updated number almost daily simply by logging in to Mint to track my spending. But there’s a reason most net worth trackers make this an annual or semi-annual exercise. The month-to-month swings are inevitable when investing in equities, and are no cause for panic to long-term investors.

If you’re feeling anxious about your portfolio puking up recent gains, remind yourself of Paul Anka’s jingle and just don’t look! Take a break from financial news. Stop doomscrolling Twitter. Instead, zoom out and embrace the buying opportunity, which is made easy by automating your investments. Keep those 401k contributions going as scheduled and tune out the noise.  

Adopt the Schrödinger’s portfolio approach

Ritholtz’s Ben Carlson mentioned on a recent episode of the Animal Spirits podcast that he takes a similar approach when the market dips, likening his portfolio to Schrödinger’s cat. The possibility exists that his portfolio is either up or down, so long as he never opens the box that is his brokerage account to find the answer. The reality is that, in 2022, it’s nearly impossible to avoid information—even Schrödinger must know the cat has been dead for months in this market—but checking on the carnage provides no psychological benefit. Rest assured, this cat will come back to life, eventually.

In order to realize outsized gains in the market, volatility is the name of the game. These periods of doom and gloom are inevitable, and as any asset accumulator will tell you, are a boon to younger investors with long time horizons. While the instinct is to sell and stop the bleeding, the only right moves are to double down and stack shares while they’re on sale, or to simply do nothing at all. This too shall pass.

Gleaning further investment advice from The Simpsons

It should tell you all you need to know about me that I take investment advice from a cartoon, but The Simpsons has provided some intentional bits of market commentary to help educate the masses over the years. Homer’s expensive visit to IPO Friday’s provides a simple lesson: diversify.  

While the broader market is currently lighting itself on fire, growth stocks have been reduced to ashes, with some individual names experiencing Animotion Inc.-esque losses in the 70-90% range. Ahem, ARKK. The best way to avoid super duper bankruptcy is to diversify into a broad index fund like VTSAX and own a little bit of everything. No matter how much conviction you have in an individual company, putting all your eggs in one basket is a recipe for evaporating your life savings.

In another episode, Homer tries his hand at commodities futures (slightly mistiming the Pumpkin market), and struggles with the anxiety and embarrassment of having to tell his family of their newfound money troubles.

https://www.youtube.com/watch?v=kDM0GLVTj_k

There’s no mistaking that many growth stock and crypto chasers—of which I am guilty with a small percentage of my portfolio—are no doubt experiencing the same pain. And once again, it’s a non-diversified portfolio to blame. I look at the speculative portion of my portfolio as an expensive lesson, but to many the recent blowup has been much more than that. If you’ve been severely burned by overexposure to this sector, use this as an opportunity to ensure you don’t find yourself in the same position when it matters most: as you near retirement.

Just don’t look!

Rather than dwell on your portfolio and wrap your identity too tightly around your net worth, do what I’ve been doing: go watch some cartoons. There’s a lot of pain in the markets at the moment, and it’s a pain that many new investors are experiencing for the first time. For those new to the markets, your investing life may even rival The Simpsons’ marathon run on television in its length. Don’t cancel the whole series because of one bad early season episode. We don’t know how bad—or how long—this particular episode will last. But while it persists, remember that the best way to avoid panic selling is the same way to kill off evil advertising mascots. Just don’t look!