By Steven M. Sears

Of the many skills and disciplines needed to be a successful investor, the most difficult may well be learning to do nothing during market hours.

There are moments -- especially around holiday-shortened trading weeks -- when it's better to spend more time thinking and less time investing.

This will seem counterintuitive, especially in the era of rapid-fire trading and zero-dated options, when every hour seems like a chance to make money. But sometimes listening to the market is better.

This is especially true because recent market action has raised questions about whether the bull trend is intact -- and since holiday trading volumes should be light as many senior investors are with their families, leaving junior staff with orders to not crash the equivalent of the family car.

Several questions remain unanswered after Nvidia's third-quarter earnings report. The company reported stellar results, but the stock and the broad market declined before staging another comeback.

Investors must now determine why the stock-price volatility happened, and what it means. Right now, it seems that investor fears evolved from fretting about an artificial-intelligence bubble to interest rates.

Investors are no longer certain the Federal Reserve will lower interest rates when the Federal Open Market Committee concludes its Dec. 9-10 meeting. Nvidia's earnings report disproved fears of an AI bubble -- at least for a while -- enabling the market mob to more clearly focus on simmering concerns that lower interest rates are needed to stimulate economic growth.

One common thought about the unusual volatility around Nvidia's earnings report -- which almost seems too superficial to be accurate -- is that crypto investors were pushed out of Bitcoin positions and forced to liquidate stocks to cover their bets.

There is probably some truth to that theory, but the stock market is too complicated, too interconnected with other markets, and too global for simple causation.

Until more information flows through the market, it will be difficult to fully answer macro questions -- even though the market has exhibited robustness in recent sessions. Thoughtful restraint seems like a better strategy than rushing into put and call options and stocks when many sophisticated investors have little idea how to price the passing scene.

The market's fear gauge, the Cboe Volatility Index, or VIX, offers little help. It was recently around 19, which marks the long-term average. The level suggests neither fear nor complacency, which supports our view that investors mostly remain in a holding pattern.

Waiting should be easier for anyone who heeded our recent fear trades. We have, over the past three weeks, advised readers to monetize fear by selling puts on blue-chip stocks that investors want to buy at lower prices, by hedging the S&P 500 index, and by "strangling" the iShares Russell 2000 exchange-traded fund to cover the Fed's interest-rate news. The fear trade is still in motion. Much will be determined on Dec. 10.

Until then, remember that investing is a multidimensional probability game that never ends. The goal is maximizing time profitably spent navigating the markets.

Let the many overconfident investors make hasty decisions. Let them panic out of positions. Let them greed into positions. Let them wager on a day's move with short-dated options -- Wall Street's equivalent of scratch-off lottery tickets.

Instead, be strategic. Be unemotional. Be ready to bend short-term volatility paroxysms to express long-term investment themes.

A shrewd trader long ago said the stock market is where smart people think of ways to take money from dumb people. The options market has perfected it.

Email: editors@barrons.com

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November 26, 2025 01:30 ET (06:30 GMT)

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