All good rallies come to an end. Deal with it.
I've lost my bearings in recent weeks. It's the rally, you see. All those sudden short-term gains play havoc with your sense of perspective.
With markets rolling along, and my portfolio riding shotgun, I started to get a little greedy, expecting my portfolio to rise 3% or 4% every week, and getting frustrated with any stock that didn't break sweat.
With greed comes that other pungent investor emotion, fear. On Tuesday I read a doom-laden article claiming China's stock markets were a crazy bubble, its stimulus package couldn't offset a 23% drop in exports, and the subsequent crash would sink the rest of us.
Normally I would have taken the news calmly, and carried on. Not this time. I was suddenly all for selling my stocks, my funds, my house, my parents, and hunkering down to avoid the second great crash that was heading our way.
Head for the hills!
I even pitched it as an idea to my editor: Sell everything you ever owned and run for the hills!
He didn't like it. In fact, he gave me a proverbial slap in the face, and brought me to my senses. All rallies have to come to an end at some point, he said, and so will this one. Deal with it.
Bull or bear -- who cares?
I realised the recent glorious run had left me addicted to the adrenalin rush of turbo-charged growth. I was desperate for the fix to continue. So at the first hint of withdrawal symptoms, I panicked and overreacted. That's no way to run a portfolio.
I'm not the only one. The bears and uber-bears are now sharpening their claws, and advising investors to take their summer profits and hibernate for the winter.
And when I read their arguments, I get fearful again.
But then I read the bulls and uber-bulls, who claim the rally is still in its infancy, and I get all greedy.
This kind of thinking has to stop. So how do I deal with it?
Strategic thinking
At times like these, it is worth going back to basics. Ask why you are investing, what your strategy is, and whether you are really up to the job. Otherwise you risk getting blown about by the constantly-shifting winds of opinion and murky science of crystal ball gazing.
So why am I investing? Aside from the sheer challenge of it, I'm 43, would like to retire one day, and because I'm self-employed I have to make my own pension plans. So I'm investing for the long-term, which means time is on my side, and I shouldn't lose heart just because one short-term rally comes to an end.
Your reasons are likely to be different, but not that different.
My strategy is to add a bit of spice to my pension funds and unit trusts by using Fool.co.uk to identify single company stocks that will outperform the market.
In practice, that means a mix of sturdy companies paying rising dividends such as GlaxoSmithKline (LSE: GSK), BP (LSE: BP), Tesco (LSE: TSCO)and Vodafone (LSE: VOD), my emerging market investment trust faves BlackRock Latin American (LSE: BRLA), Baring Emerging Europe (LSE: BEE) and Scottish Oriental Smaller Companies (LSE: SST), and a few thrillers from the AIM markets, sourced from Maynard Paton.
Barring accidents, the dividend-payers and investment trusts should be my constant companions through thick and thin. That means I don't abandon them at the first sound of gunfire.
The growth stocks require closer attention, naturally, but if the original reason for investing in a business is still in place, I shouldn't get spooked by feverish macro speculation. In other words, no timing the market.
The long game
In conclusion: we should all play the long game, only investing money that we won't need for the next five, 10, 15 or 20 years. This means the next market setback isn't a reason to sell, but an opportunity to buy.
Draw up a long-term strategy and stick to it, rather than getting carried away by short-term highs and lows.
As Brian Richards points out in Companies You Should Buy Right Now, we have a tendency to buy and sell too often, suffocating growth and generating excessive dealing charges. I have suffered from that tendency.
So I'm not selling my parents, or my portfolio. Although I am cooling things by edging into low-risk, dividend paying stocks, having swallowed Bruce Jackson's recent argument that these are The Only Shares To Buy Today. And then I'm sticking with them, which is wise, given that around 45% of stock market returns come from dividends.
The final question is whether I am up to the job? That one hangs in the balance, but the signs are a little more positive. Sometimes you have to lose your bearings, in order to find them again.
More from Harvey Jones:
> Harvey owns GlaxoSmithKline, BP, Tesco,Vodafone, BlackRock Latin American, Baring Emerging Europe and Scottish Oriental Smaller Companies.
