ARGH! The sharemarket is crashing! What should I do?
It seems every second day the news is reporting ‘spectacular crashes’ on the share market. Weirdly enough though on the other days they talk about how the share market is ‘booming’.
The media does not care about reporting the facts.
Share market ‘crashes’ make great news. They invoke fear and cause people to watch and read more news. What the news articles fail to mention is that this is not only normal, but expected. The share market goes up and down.
But if it’s going down shouldn’t I sell my shares?
That is likely the worst thing you can do. Like any investment, the share market goes up and down on a daily basis. Property investment goes up and down too, it’s just you usually don’t get your house valued on a daily basis. Sometimes shares go up and sometimes shares go down, what is important is that they go up over the long term in line with your expectations.
If shares go down and you sell you crystalise the loss, this means that when shares again rebound back up you won’t get the value of this. Overall, the daily price of shares is not that important to most investors, what is important is that your shares are performing as expected in line with the market and your goals.
So before you panic and sell all your shares, take a deep breath, speak to your financial adviser and work out whether selling is the best strategy for you. Remember, real wealth isn’t built overnight.
What about you? Do the daily rises and falls in the share market make you nervous?
This post is from Ben Brett. Check out our details in the About Us page.