Was just reading on Yahoo finance how the equities markets have lost 2 trillion dollars in the last month. Two months ago, my 401k was up over 14%, now it’s up by only 5% or so. It wouldn’t surprise me in the slightest if it finished in the red for the year. Not really a problem in my eyes, I’ll be in it for another 35-40 years. When I see selloffs like this, my reaction is BUY BUY BUY!!!!
It sounds stupid, but does anyone remember how to make money? Buy low and sell high. A lot of people buy high and sell low, and the more risky the investment, the more likely they are to do that. I do think that when dealing with individual companies, it’s best to get out and cut your losses if you don’t think the company can rebound. But if you’re in mutual funds, especially index funds, bear markets are where you should spend the most. The lower it goes, the more you should buy. I’m upping my contribution to the max it can be (15% I think) for the time being. In an ideal world, I’d be able to buy every time the market dipped and sell whenever it went higher. I’ve been told that most people lose money during bar markets… so don’t do what most people do….:-)
Isaac