I have a small stock portfolio that is for my retirement and an individual investment account. But now that the stock market is falling should I just leave the stocks as is and wait for things to rebound or should I sell. It's not a lot of money and I don't plan on withdrawing money for at least 10 - 15 years, so should i just ride it out or should I sell some and invest in bonds or ???
I don't have a financial advisor, I opened these accounts on an individually managed service like sharebuilder.com so I get no advisor or anything...
Any thoughts? I've been googling about this... I actually don't have any "hot" volatile stocks or any "hot picks" from amateurs. I did some research and picked older companies and funds (including SPY) that have proven to perform well over time. They are moderate risk holdings. Since I am young with no dependents I decided to go a little higher on the risk scale. Plus, I don't plan on touching the money for at least 15 years plus. Depends on what companies you invested in. With my stocks I am holding, but there were stocks I use to own that I probably would have sold if I had them today sell the stock because if it goes down you lose money. well if you were going to play that game you should have sold in Nov of 07. Golden rule is to sell high and buy low. By selling in Nov you would have preserved your principal and had cash to pour in when the market bottoms.
What you could do is move to a money market that getting 4.5% (inflation is at about 4.5%) so its a break even. Then when things start to look good jump back in. Timing the market is tough! I would save move 30% to a safe haven and let the rest sink. hold tight!!!!!!!!! things will rebound- I am in the same position as you. Try not to look at it........just forget about it and know that it is for the LONG TERM The US economy is going to suffer for at least the next 3 to 5 years. Let me give you a short course in stock investing, so you won't just sit there and lose money... as you are now.
Here is a system that works when used a few minutes a day.
Only buy stocks that are in strong up trends. Determine that by taking any stock symbol to www.bigcharts.com. Enter the symbol and you can quickly tell if the price trend is up, down or sideways.
Only buy stocks in strong up trends. When they break below a 50 day simple moving average SELL. Find another stock in a strong up trend to buy.
Here are some stocks that will do very well for the next two years: GLD, DBA, SLW. Go to BigCharts.com and notice the strong uptrends for each.
Here's wishing you as much success as I've had. I think you are a long term investor and what would be best is to hold on them, but if you have a profit now i would say cut and run then regret later that you should have waited. something else is you can sell buy some bonds and hedge on the risk of loosing alot of money. but if your portfolio is well diversified you will be ok.
Actually now all rational investors are depending on speculation and stomach movement after digestion all the information available.
it will ultimately depend on you gut feeling.
business and financial studies student; HI Brooklyn:
Start interviewing stock brokers and in the interview bring along your portfolio and ask them what their approach would be. Start working with one of them if you appreciate what they are saying and you can relate to them well
The market is volitile ~ surely. If you wished another place to go and look at an approach to this in a self managed way . . . these people (publicly owned stock on the market itself) is doing pretty good work with people ~ http://www.investools.com/ . . . there's some free tools and starter programs here that are useful The answer is there are no easy answers when it comes to investing.
I have no clue what you are holding, but I am going to guess it was either what was hot, or what someone who has no financial background told you should buy?
Over the last 19 years I tell people they need to have an investment plan, a strategy in place before they invest a dime.
Questions:
(1) What is my risk tolerance? How would I feel about a 30% or greater decline in my in investment?
(2) Do I need this money within the next two years? If yes, it should not be in the market. It should be in US Treasury Bills (Federally tax exempt), bank CD鈥檚, or FDIC backed cash (savings accounts). Not much interest, but you don't lose money you are going to need.
(3) Is this money earmarked for retirement? If Yes, consider IRA or ROTH IRA account.
(4) Does my job offer a 401(k) or other retirement plan? If yes, sign up and if the company has matching contributions, be sure to at least contribute up to the match. Pre-tax items such as 401(k) contributions lower the amount of tax that is taken out of your pay check.
(5) What is your debt situation right now?
(6) What are your assets and income?
(7) Do you have expenses coming up?
(8) Do you have job stability?
(9) Your age?
(10) Dependents? married/ single?
There are many question I ask people which can take several hours to go over before we put a dime into any investment. Beware of people who sell you on some hot tip, or trend, or who have no financial qualifications to provide advice. They may be right once or twice or in the short run, but long term they often blow up (RE: the 1995-2000 amateur day traders).
For most people, I鈥檇 consider using broad market index funds.
S&P 500 (SPY)
80% of mutual fund manager underperform the S&P. So you're likely to be 80% ahead of the pack.
Suggest Dollar cost average. Place the same dollar amount in the fund every month. If the market has a huge down day 300-500 points at curr levels, put 1/12 of the money you intended to put in over the next 12 month.
Have a min 10 year time horizon for non retirement money. Never invest in the market money you will need in 2-3 years or less.
Open IRA, or Roth IRA. Contribute the max each year and on a monthly basis.
Max out any employers contributions each year.
Suggest not to do's:
1. Close eyes and hope.
2. Feel bad for not being able to predict the future.
3. "Only buy stocks in strong up trends." That is momentum investing, a trader's game, not a long term investor's game. Remember it's buy low sell high, not buy high and hope it goes higher.
4. If you can't sleep well at night, your in the wrong style of investing.
5. Last summer I became wary of money markets. Funds that pay higher than average returns are lively to be leveraged and may contain real estate backed mortgage paper - Collateralized Debt Obligations "CDOs" that used to be safe but now called into question. For cash look at FDIC backed money markets or other FDIC backed cash investments.
6. I actually don't like Investools. I think it's great to educate people, but they are more trader mentality, and all about selling you very expensive software that I don't think is that great. I have used many software and trading programs over the last 19 years used by institutions/ hedge funds cause that is what I do. You don't need expensive software or trading, buy/sell programs unless you are trading daily and managing significant cash. 99% of the people are better off putting that money in a ROTH IRA and buying the S&P500 Index via monthly automatic deposits.
Do Suggest:
Dollar Cost Average and indexing (S&P 500) and 10+ year time time, easy and you don't have to watch the day-to-day noise in the market and media.
If have questions, just seek a non-pressure broker/ financial adviser with 10 or more years experience. I don't like the planners cause most don't know squat about the financial markets.
Good Luck! If you don't feel like selling part or all of your positions and waiting it out (which isn't a terribly bad idea right now it seems) you can do a number of things---
#1. use options -- u can buy put options against your long positions to create a price floor (or u can sell calls to create covered calls, though this can be more risky)
#2. go long Short ETFs -- there are short and ultrashort (negative 200% return) on many of the major indices and sectors.. if you add these to your holdings you will have downside protection in your portfolio.
#3. wait it out and double down at these low prices -- over the long term the markets will rebound and trend higher... when this will happen is anybodys guess and the short term outlook does not look optimistic Don't sell - buy! The market is down now, but you're in this for the long term, it will rebound and stock prices will rise - buy now while they're lower and you can buy more with the same dollars. This will increase your earning potential over the long haul. I would NOT sell in the current market. At this point, they have fallen and if you have 10-15 years, and they are not risky investments, you should be fine. In fact, you should be contributing more on a regular basis (via payroll deductions to a 401(k) or regular account or IRA) so that you can lower your cost with dollar cost averaging! Also, consider a financial advisor. Some of us are very good and really do have our clients' best interest always in mind! | 