I’m worried about the uncle point.

I’ve cried uncle a few times in life.  Fortunately, not recently.  My brother has not pinned me to the floor with his large arms since we were young kids.

If you grew up with siblings, you may remember the fights and wrestling that took place when you were younger. The combination of seemingly endless energy and fluctuating hormones can make two brothers want to wrestle until one finally gives up from exhaustion.  When your face turns blue and you can’t breathe right anymore, you cry uncle and hopefully you get unpinned from the floor with your body still intact.

You have been defeated and have had to give up. This is humiliating.

There is no denying that you are physically weaker and this might lead you to believe that you are mentally weaker.  It’s just plain no fun crying uncle. 

Hitting the Uncle Point is Painful

Today, I am worried about a different uncle point.  The stock market uncle point. Everyone invested in the stock market has an uncle point.  If they say they don’t, they are lying.  The uncle point is when the losses in your portfolio become so deep that you cannot stomach them anymore.  You have to sell off your holdings to preserve your wealth.  The pain is worse than turning blue in the face from an older and stronger sibling pinning you to the ground.  You do not want to hit the uncle point in the market. 

The act of selling means you have locked in the losses.  Now, you have a much lower capital base to work with.  We all know the key to wealth is the power of compounding. 

Stay safe

James