There are always going to be down days on the stock market. The reality is that with every up there’s a down lurking somewhere around the corner. Today was one of those days with the TSX and Dow dropping well over 100 points each. Is it time to pack it in, sell everything and head for the cash under the mattress approach? Clearly the answer is no, but sometimes it’s good to take a look at what you’re feeling (or doing) on days when the markets are going down.

The media loves a bad news story and many people are concerned about Ireland and what they’re going to do to sustain their economy and the ripple effect that will have with Portugal, Spain, and more Greece worries. Are we heading toward another double-dip? How does China play into all of this? The headlines are everywhere and every day we see one more reason to leave the stock market and when we see the news compounded with the big drops in the stock indexes we can be swayed to think that we need to jump out of this sinking ship.

The reality is much different. How many times have you exited from a losing position only to have it turn around days or even hours after you sold it? This can happen all too often to investors who are not convicted by their investing philosophy and goals. Are you convicted? The perfect time to tell whether or not this is the case is on a down day on the stock market where you see all the negative press and the gloomy numbers to support it.

When you feel like selling or just plain quitting, ask yourself if it’s your selling because you have reached your target, or your core investing thesis has changed. The reality in most cases is that neither have happened and you’re letting your emotions get the best of you.

The number one enemy of the investor is themselves. By taking your emotions out of play and checking your reality on days where you’re scared will help you take your investing to the next level of success.

Technorati Tags: Investing, investing basics, stock market