Advice for catching falling knives: don’t. If all it’s going to hit is the ground, let it fall, then pick it up. That’s the overly dramatic version.

The personal finance version is narrower and deals with stocks. If a stock’s price is dropping, don’t buy on the way down. Buy after it bounces back up, and even then (and pardon the expression) make sure it isn’t a dead cat bounce. 

Trust me. I’ve been cut by grabbing after stocks that I was sure would bounce back from irrational pessimism. They’d dropped 20%, 50%, 80%, 90% from their highs, which in reflection were irrationally optimistic. At the time, though, enough investors thought MVIS was worth whatever price it had because someone was willing to buy it at that price. From over $500, it dropped to $0.15, and I’ve bought several times along the way. Today, it closed at $1.17.

Today, the NASDAQ closed at 15,587, down ~5.8% for the day, down ~8% for the week, down ~14.7% for the month, and down ~29% from its late 2024 peak. Remember 2024? Seems like a world away.

There are enough pundits pondering where it, the economy, our finances, the nation, and the world go from here. I’ve got guesses, but they are based on logic and from what I can see, the use of logic is no longer authorized, evidently. Hopefully, that’s temporary.

Correction is such a vague euphemism that it covers up lost jobs, people in distress, and the possible demise of the explicit and the implicit world order. 

I say all of that to say this. Such a steep drop in the stock markets is a falling knife. I’m not sure anyone can stop it, and if they try, they might get badly hurt. In this case, ‘they’ could easily be a country. Letting the knife fall as far as possible will also involve a lot of hurt, er, disaster. It is painful to watch, but without being able to stop it, sometimes the next best choice is to watch it and do what is necessary to get out of its way. It is sad to say, but the closest analogy that comes to mind is watching an asteroid heading towards us. A march is not going to stop it. At best, some mega-organization can nudge it enough to miss or ‘only’ graze us, in which case, then we can actively begin to recover.

The steeper the drop, the worse the hurt. The steeper the drop, the more likely more than just marchers will be impacted. Oligarchs eat oligarchs. It is a foreign concept, but some governments act logically, compassionately, and responsibly. Hey, I said it was a foreign concept. It is time for it to come back into style.

My applause goes out to some friends who sold before the fall. They’re not happy about it, but they dodged the falling knife. They’re in a good position to weather this storm. (Ugh, a storm of knives? Shudder.) They have cash to take care of bills, and if the bounce happens soon enough, they can buy back into those stocks at prices below what they sold at. Sell high. Buy low – or not. This has become a crazy game, and I believe that some of the powers at play are acting as if it is a game, a really big game that they can’t truly lose. Got a billion and lost $990,000,000? Few folks will feel sorry for you.

Personally, I maintain my Long Term Buy and Hold (LTBH) strategy. Timing markets is tricky. Did you accurately predict this rise and fall? I still have about a third of my house sale as cash, so I am buffered at least that much. If Social Security and Medicare survive, then it is easier for me to survive. They both have knives falling their way.

I can only control what I can control. I can’t control the markets, but I can control what I invest in. My current investments are in companies that may not be as affected as mega-corp retailers. Tariffs will affect almost everyone, but companies that sell custom equipment, or low-volume high-priced products, or haven’t released their designs yet will probably be less impacted than Wal-mart.

And, I caught myself reaching to catch a knife or two. Irrational pessimism can be followed by irrational optimism. I’m an optimist. I suspect the USA has thrown away its place in the global hierarchy, but I think the companies I am invested in have a reasonable chance of eventually thriving. Eventually. 

I also won’t be surprised if some center of power, whether an individual or organization or government, might act swiftly, decisively, and dramatically unilaterally. They’re hurting, too, and they may see a chance to shift the power to someplace more responsible and in their favor. If so, anything can happen, and that’s a guessing game of infinite proportions.