And got out of stocks two weeks ago.
The S&P 500 — which tracks 500 stocks rather than just 30 like the Dow — was down 80 points today, its 4th worse point loss ever and its 10th worse percentage loss (-6.65%).
The S&P 500 has lost 16.2% in two weeks.
People are reacting to margin calls, fear, emotion, and doubt. That is for sure. Buying gold futures out of panic and whatnot may not be the best strategy.
If you sold all your equities, you might consider buying some back. “That is crazy,” you say! Are the market values of most stocks down? Absolutely they are, and at amazing proportions. That makes them more attractive. Are companies such as: Dupont, P&G, Microsoft, Apple, Exxon Mobil, and Mc Donalds going belly up? Think Walmart is going bankrupt. You might think again.
Should we ignore the dividends that many companies pay? Some companies are paying a higher yield than bonds where so many are jumping.
Are most investors that you know trading frequently, or are they in for the long run? I know somebody that invested in a company some years ago by purchasing some shares. After some time, and by reinvesting the dividends every quarter, but never another penny, the share number grew more than 5 times and the “market value” grew to be significant, even after today.
So, if you invest in equities for their market value, you should have read the memo and taken it for gospel. If, on the other hand, you invest for growth and the long term … well … there are varying opinions. As one analyst described it, these are the times when fortunes are made.
It is not just about market value.
What, you’re saying we shouldn’t look at stocks as just a game of Chutes & Ladders?