Dont let them fool you. The media and financial pundits arent going to pay your bills, now or in retirement and they arent going to reimburse you for losing any money in your investments. The media has put financial people forward for years when the stock market dips and their motto is always, Dont panic/Dont sell. Weve heard this talk before, and it hasnt made you rich. Dont panic isnt advice its telling you to disregard the most obvious facts of the situation: Rescuing stocks, PAWS & effectSell, sell now, you fool
The only way to lose is to hang on to investments that nobody else wants. You lose your margin of safety if your stocks decline past the price you paid for them. That is the time to sell, as your margin of safety is reduced its defensive. The only way the game works to make you money is when people are willing to pay more. Most folks do not hedge their exposure, and so they are left vulnerable in the event of a severe decline. When you have properly protected your position youve limited your loss in advance to an acceptable amount, and if the stock price gets crushed youll get back most of your capital. PAWS (plenty of almost worthless stock) and effect, if your stock holdings stay down for the long-term you do not benefit it causes more frustration to hold investments all the way down than to sell and at least have the chance to buy greater amounts of stock when the price is extremely low and due for a rebound. What is the path of least resistance? There is a valid reason for stocks to sell off the glory days have passed long ago (since early 2000) and the perception is that boom times are far off. Use logic, the only people that get hurt financially when stock prices decline significantly and stay down for years are the people that held on!