If you didn’t panic on Friday, after the Dow Jones tumbled more than 500 points, you must have been awfully tempted to yesterday. That’s because the American markets fell a staggering 630 points on Monday. As usual, investors are reacting with thoughtful restraint to the slightest bit of bad economic news.
What really grinds my gears in this scenario is how preventable this entire situation was. Without getting into the blame game, let’s just say that everyone involved could have chilled out, taken a deep breath and kept this from being so severe. Instead, we’re stuck with a downgraded U.S. debt and one of the biggest drops in the stock market in the last 100 years.
Yet I advise you not to panic, despite everything. This is more likely to be a blip than a sustained nosedive. If you hit the ejection button now, you’re going to lose a ton of value on your stocks. With that in mind, here’s a couple of quick tips that will be especially helpful if you get an itchy trigger finger.
- Don’t sell. You may be tempted to, but keep in mind that the reason we’re in this mess is because investors stampeded toward the sell line at the first sign of trouble. Your investments aren’t likely to be considerably less valuable than they are now for quite a while, so hang tight.
- Don’t believe the hype. If you’re a reporter, it’s hard not to be grim about what’s going on right now. It sells papers, for one thing, and you are immersed in a world of panic, back-stabbing, deceit and glum projections, especially if you happen to be working in Wall Street or on Capitol Hill. But that doesn’t mean they’ve got the full picture.
Indeed, once investors can be coaxed out of their rabbit holes—I’d say by the end of the week or early next week, at the latest—the decline will give way to a slow increase again. In fact, stocks were up about 200 points as of this writing. The overall news actually isn’t all that bad, as BizEngine noted recently. There’s even been gains on the job front, albeit modest ones.
So if you’re going to read the papers or watch CNN, do so with a grain of salt in your hand. You’ll be wiser and less stressed out for it.
Do you have tips for fellow stock marketeers and businesses? Share them in the comments!