Don’t Bail When Things Look Bleak

by James Hendrickson on November 23, 2013 · 2 comments

Hey All,

Here is a quick thought for today.

Don’t bail in your investments when the market is in a downturn.  The hardest time to hold onto your assets is when they are down.  It’s a total drag – I totally remember the stock market crash in 2oo8.  I would watch my stock portfolio lose $10,000 a day.  But, most investments are going to go through periods of depression – its the nature of the cyclical economy.  A downturn is the worst possible time to sell.  Don’t sell your assets when there is a sale going on.  Provided you feel the long-term fundamentals are sound, don’t sell.  In fact, consider buying more!



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{ 2 comments… read them below or add one }

1 Kathy November 24, 2013 at 7:56 am

Good point. During that downturn, we only had bonds and dividend paying stocks. The interest and dividend payments kept rolling in even though our net worth looked a little worse, the income was the same throughout the same time. We held everything and it recovered. We didn’t have to sell at distressed prices because the income was still there. That’s why I don’t like mutual funds. Too many people follow the herd mentality and sell at the bottom so the whole fund takes a hit.

2 James November 24, 2013 at 8:45 am

Hey Kathy,

Great point. For me the hardest part about downturns is that I’m not much of a saver. During the 2008 downturn I had the opportunity to get shares in a Canadian energy trust at like 15% of the pre-crash price. The shares were trading at $1.82 and eventually recovered to $9, I knew the stock was going to come back, but I just didn’t have any cash at the time to take advantage of it.


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