[Summary]
The oil shock was a phase in which soaring resource prices had a major impact on the economy.
What is more likely to fail during an oil shock is not the lack of knowledge itself, but the fact that you end up justifying your hasty decisions afterwards.
In actual investing, the starting point is to look at the impact on inflation, resource stocks, and consumption. However, it is important to note that it is easy to assume that resource prices have the same impact on all companies.
In this article, we will organize oil shocks not as "knowledge" but as steps to check before buying or selling. Don't rush to conclusions, read according to your financial amount and time horizon.
First thing to know about oil shock
When looking at oil shocks, first determine what you want to judge. The information you need will change depending on whether you want to know the meaning, confirm before buying or selling, or review your current holdings.
Especially for beginners in investing, the easier the words are, the more they tend to take them as a conclusion. The oil crisis alone is not a factor in making decisions. If you want to check it, it is more realistic to look at it in conjunction with fund management, holding period, and opposing materials.
Scenes where oil shock is likely to cause failure
If we look at the oil crisis as a failure pattern, we must first make a narrow premise. It is important not to mix up whether you are talking about the market as a whole, individual stocks, NISA or long-term funds.
Checking the following points will make things a lot easier.
| Axis to check | What to see in oil shock |
|---|---|
| purpose | What do you use to judge? |
| Time axis | Which is closer to short-term trading, long-term holding, or NISA? |
| basis | Which one is more important: price, business performance, interest rates, exchange rates, or psychology? |
| risk | When things go the other way, where should you look again? |
| action | Will it lead to buying, selling, or doing nothing? |
Points that can easily cause trouble in making decisions
Oil shocks don't just come from a lack of knowledge. In fact, there are situations where we interpret something conveniently because we know a little bit about it.
- Don't decide whether to buy or sell the moment you see the oil shock.
- Do not mix the time frame that suits the oil shock with your own holding period.
- Don't increase your position to recoup your losses
- Don't make a decision just based on SNS or rankings.
The important thing here is not to settle on just oil shock as the correct answer. In investment, the meaning of the same material changes depending on the market, holding period, and amount of funds. When in doubt, prioritize confirmation over conclusion.
Checklist before buying and selling
Before making an actual decision on oil shock, check at least these five things.
- Can you explain in one sentence the purpose of watching the oil shock?
- Have you confirmed one or more countermeasures or failure conditions?
- Are you investing your living funds or money that will be used soon?
- Have you decided in advance the criteria for cutting losses, taking profits, and continuing to hold stocks?
- Are you making judgments based only on social media or short headlines?
Checklists are simple, but they prevent you from adding reasons after making a decision. The purpose of checking oil shock is not to act faster, but to reduce unnecessary errors in judgment.
Summary
The oil shock is a material for reorganizing investment decisions. Even if you read it as a failure pattern, treating it as a standalone buy/sell signal will lead to poor judgment.
The points to keep in mind are as follows.
- Decide first the purpose of watching the oil shock.
- Do not mix time axis and amount of funds
- Check not only good materials but also negative materials
- When using NISA and long-term funds, consider how to handle losses
- When in doubt, reduce your position or postpone it.
The more knowledge you have, the safer it seems, but in the market it can become dangerous if you use it incorrectly. It is realistic to treat oil shocks as a tool to pause before buying or selling, rather than as a word to rush into judgment.