Markets Take a Big Hit - What’s an Investor to do?
Political spinners wanted to tie the selloff to GOP Vice Presidential candidate Sarah Palin’s speech Wednesday night, however that’s a long stretch no matter which side of the political aisle you’re on.
The unfortunate response after a big selloff is for panicked investors to dump stocks and seek safety in cash.
The problem is you are almost guaranteed to have executed the infamous “buy high, sell low” strategy.
No one knows where the bottom is in this market, so, as I predicted several weeks ago, there is likely more bad news to come. There has been no significant change (except for the worse, in some cases) in the fundamentals that drive the market in the short-term.
What’s an investor to do?
The best strategy is probably to sit on your hands and keep your finger off the “sell” trigger.
I have a collection of articles on when to sell a stock. Check out the information and advice before making a rash decision.
Comments
Ken,
because I do not subscribe to the “buy high, sell low” philosophy, I have done no selling since October of 2007. I have, however, seen my net holdings decrease at least 10%. This is disappointing but not particularly worrying. But what I have found disturbing is the cash added, another 10%, has just “disappeared.”
So my question is “why buy something that will be worth less tomorrow and probably even less the next day?”
if we hold stocks, we could loss too except the economic recovery. Therefore, we confuse side by this situation
I certainly agree about keeping trigger-happy fingers off the ’sell’ button, but what about the ‘buy’? I regret waiting for Buffett to buy GS before I did, since he got a much better price, and drove it up for the rest of us;)
Clearly, stocks are going to swing wildly — mostly lower — for a while, maybe even after the ‘bailout’ but as long as we are not in a hurry to get at our money, isn’t that the best time to buy?