Buy when there’s blood on the streets – that’s how the old saying goes. Plenty of people say it, but very few of them actually do it when the blood starts to flow. That’s because acknowledging generational wisdom is quite different from controlling our emotions and acting on it.

The word “unprecedented” has been overused since the onset of COVID-19 in the U.S., but from time to time, it’s the only word that can accurately describe what’s happening in the global financial markets. Right now, the sheer volume and magnitude of market dislocations are truly unprecedented.

From Apple to Zillow, there have been plenty of must-watch earnings reports this year. Few traders would have put FedEx on their list of potential show stoppers, but as it turns out, this company’s woes have ripple effects far beyond the scope of this package delivery specialist.

In July and early August, there was a breathtaking rally in the major stock market indexes. The was the “wishful thinking rally” based on the assumption that the Federal Reserve would back off and return to loose monetary policy. It was a mistake to think this back then, and it’s a mistake to think it now.

Who wouldn’t pass up a chance to effectively buy an asset for pennies on the dollar? Most investors, that’s who. Even though silver is a metal with dozens of industrial uses and has been used as money for millennia, when the going gets tough, too many traders simply cut and run.

If you think that Europe’s problem is too remote to affect the U.S., think again. The European debt crisis of 2011 contributed to a 20% stock market correction in America, but that’s nothing compared to the rout that’s likely to occur in 2022’s back half.

Ironically enough, many Americans celebrate the pride and value of hard work by taking a well-deserved day off on Labor Day. Just as ironically, it’s the same bureaucrats who refused to put any real effort into reining in government spending who are now calling for fiscal discipline.

The drive to run with the herd is built into all of us. It’s natural and normal, and it’s an essential survival skill in nearly every aspect of life. Among the few exceptions is in the realm of finance, where running with the herd can lead to bruising financial losses.