Wednesday, January 29, 2014

What do you do when the stock market is down?

If you follow the market (maybe as obsessively as I do) you may have noticed that it has been less than stellar since the year begun. This is a time when maybe a lot of people start fearing stocks and the reason why some are afraid to start investing in the first place. Well, ironically, sometimes (or, often times) a significant downturn in the market can be the perfect time to enter for the first time or simply add to current positions of quality stocks in your portfolio. As I have mentioned a few times on the blog—any ‘bad news’ in general can and will likely have an effect on the market as a whole.

As noted in my ‘about me page’ I first started investing in 2008---  one of the worst years the market had in a long time! However, my mentality was (and still is) to invest for the long term. I keep track of the companies I invest in and as long as they continue to deliver as expected and as long as I see a healthy future then, I stay the course.

 When the market in general is not doing well Quality (and bad quality) companies may go down in price. So, what does that mean for you? The possibility of getting great stocks ON SALE! Just like you get excited when your favorite stores are having a great sale, learn to get excited when the same thing happens in the market and do not panic.

Remember – nobody can predict the future (if that were the case we’d all be billionaires). Even after you buy the value of your investment may decrease or increase so, don’t try to time the market. Simply keep a list of prospective companies at hand and wait until they “go on sale” (as many stocks are at this time). Don’t be afraid!!
Cheers to quality stocks, thinking long term, and reaping profits!

I leave you with a quote by my favorite stock guru and something I truly believe in:
“Investors should remember that excitement and expenses are their enemies. And if they insist on trying to time their participation in equities, they should try to be fearful when others are greedy and greedy only when others are fearful." –Warren Buffet