Keep calm during market upheaval

By Submitted Article on March 27, 2020.

I have seen my stock portfolio lose so much money in the last few days, I am beside myself with panic. I am not sure what to do. I don’t have much invested but I was thinking of selling everything so I don’t lose anymore. What do you think?

Margret (Marg)

Dear Market Uncertain Margret!

Marg, I would suggest to just hang on to your portfolio and not follow the crowd into a selling frenzy that we are now seeing in the stock market. Today the fears surrounding the impact of COVID-19, now called a global pandemic, and the oil crisis continue to cause our markets to be unstable. There seems to be no end to the rapid changes that have been hitting our markets with the TSX dropping 12.3 per cent on Thursday, March 12. This was lower than “Black Monday” in 1987 and some say even lower than the big market drop of 1940 when Germany invaded France.

Even though you may be filled with anxiety and worry, it is important to keep calm and see there is usually always a silver lining in every tragedy that we must endure throughout our lives. We have seen the markets do this many times in the past. It is important to remember that what goes down, always comes right back up when you are looking at the stock market throughout history.

I know the markets are tumbling into double-digit losses, but I must remind you that you really haven’t lost anything unless you sell – so don’t panic and do not sell. This is exactly what people did in the 2008 financial crisis only to wonder when to get back into the market when it began to rebound.

During that time, many investors cashed in their portfolios in a panic sell that we are now once again witnessing with the COVID-19 pandemic. In the past this behaviour caused investors to lose thousands of hard-earned capital when they cashed out, only to turn around a few months later to buy back into the market as it began to climb, of course at a much higher stock price.

Why not see this as a stock market “sale” event. Your adviser may call this a Tactical Asset Allocation – using a unique event or opportunity to purchase stock at an undervalued cost. It is important to always seek professional guidance especially during these times of market uncertainty. While we can’t say that we are out of the continued downward trend of equity markets, the sharp sell-offs will soon dissipate and, as we have always witnessed in the past, markets will begin to rebuild. Talk to your adviser and see if this new market landscape is something you can take advantage of. This is the time to be buying good stock picks that are at record low prices and a great value. We don’t want to be shortsighted when investing for the future. Consider the long-term advantages of buying into the market at low price points to capitalize on future profit when the market turns again. Good luck and best wishes,

Money Lady

Written by Christine Ibbotson, Author of “How to Retire Debt Free and Wealthy.” Follow on Facebook & Instagram

If you have a money question, please email on website at: http://www.askthemoneylady.ca

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