Quote:
Originally Posted by William Paquet
The bill they are trying to pass remains problematic. Until it's fixed it won't ever pass.
The most important lesson I have learned in the market is don't sell into panic. Once you do, you secure the loss. It is amazing how much stocks can move in a single day. And I mean up and down, the same stock.
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Mr. P and I have waxed on this topic in threads before. The most important lessons of investing are:
- Stay diversified
- Time in (as opposed to timing) the market
- Continued, routine investing
To the latter point, there's a tried and true technique called dollar cost averaging that says invest incremental amounts in the market at regular intervals over time. This way, when the market's up you're not buying much at a high price and when it's down you're buying more at a lower price, all for the same amount.
If selecting individual stocks, pay attention to P/E (price/earnings) ratios. If the mutliple is in the teens or low twenties it's probably a good value. As it gets higher, the value becomes more problematic.
Don't sell in a panic (selling low) or buy when performance is strong (buying high). This is the opposite of what investors should do (buying low/selling high).
Mr. P is correct about daily swings. For people (like all of us) hit now, our losses are paper losses, not realized losses. Once you sell, you've lost. In the past, like 1987 or 2001, the market's come back strong after a few years. That may not happen the same way now as the value chain in today's market economy is resting on loose ground, but it's a safe bet it will come back.
Keep your heads.
