As most everyone is aware, the current times this past week and the week before have been quite crazy! This is to say the least!
With the spread of the Corona Virus basically all over the world at this point, it has had numerous affects on everything you can imagine and then some!
From the obvious of health concerns and travel restrictions, to many other things including businesses closing down (or rather being ordered to do so) and even the stock market taking a deep dive into the deep end! Yes the same stock market that has been doing so amazingly well for so long! It has finally took a turn for some of the worst results since 1987 and black Monday.
This is all a lot to take in and understand. It also seems like every hour there's new and different information about what's going on out there as well as what new policies and procedures are being put into place to try and remedy the situation!
Among all this, everyone from average Americans to big time investors are beyond freaking out with the stock market and the outlook of the economy over the next few weeks to months.
Numerous people are and have been selling and pulling out of the stock market for the last couple of weeks.
This however can be a very deadly and costly thing to do for ones portfolio.
Why you may ask? Versus staying in and losing more?
Most people, more than 95% cannot "time" the market where they are able to pull out at the exact right time in order to not sustain any losses.
On the flip side it is the same as in an upturn and strong market, people cannot "time" this either and typically end up buying way to late in the cycle after they "heard" about the stock or fund and decided to buy. Many times at that point most of the gains are already realized and they end up buying at the height of the market.
When you try and sell after your stocks tank, YOU LOSE MONEY. Then when you try to buy back in when everything is "better" you are buying too high and are really LOSING MORE MONEY.
Due to these facts, it is typically best for the average investor and then some to get in and stay in. As well as have a balanced portfolio so the highs won't get as high, but most importantly the lows definitely won't get too low.
When you keep your money in you are still allowing it to compound on itself and grow.
When you don't, you get stuck playing a timing and guessing game that is very difficult to win.
The #1 rule in investing is: Don't lose Money!
If things go down and are in a bear market, hold on and wait for them to turn and the bull to come back out.
Do not panic and let your emotions overrun your logic.
I wanted to remind everyone of 3 wonderful quotes by legendary investors:
“Be fearful when others are greedy, and be greedy only when others are fearful.”
The time of maximum pessimism is the best time to buy, and when many accumulate the most wealth. -Sir John Templeton
"For those properly prepared, the bear market is not only a calamity but an opportunity."
-Sir John Templeton
Keep these in mind always as an investor!
Also do not be afraid to apply them! Right now may not be a bad time to do your research and get into the stock market due to the times we are having.
The Choice is Yours!