News & Views
Stocks Are Down: What to Do?
The stock market took a drop on Tuesday after the Ukraine story got scary. On Wednesday and Thursday, the financial media was full of advice on what to do. Sell? Hold? Buy?
The answer depends.
If you are a trader, you should have already followed your sell signals.
If you are an investor, it depends on what sort of companies you own and what sort of time perspective you have.
If, like me, you own strong companies that will be here in 10 years, you might want to do what I’m doing: holding with an eye out to buying more.
Otherwise, you should look at each stock in your portfolio individually and ask the following questions:
* Will the company be here in 10 years?
* Has anything about it changed fundamentally?
* Will its customers stop buying its products?
* Will its sales collapse?
* Will its profits disappear?
The answers will tell you what to do.
Another thought: In times like these, I think of Warren Buffett’s famous quote: “Be fearful when others are greedy, and greedy when others are fearful.”