Published: October 09, 2008 11:37 am         

Stocks

Now is not the time to panic

Anyone with money in the stock market has surely wondered what to do next.

Is it time to sell? Or time to buy? Should you put your money in a certificate of deposit? Or just hide it under the mattress?

This week’s continued declines have done nothing to ease those concerns. The market has lost its footing, and it’s not at all clear when it will stop its fall.

Obviously, a week ago would have been a good time to sell. Or maybe a month ago or three months ago or last year.

Hind sight of course, is 20/20. If we’d all known then what we know now, we’d all likely have made different decisions.

No one has a crystal ball. No one knows whether the market has hit bottom, and we can’t be sure when things are likely to improve.

None of us really knows where the market will be next week, next month or next year.

But we can feel pretty confident about one thing: It will come back. It came back after the Great Depression, and it will come back now.

There is an old adage in the investment business that is as true today as it ever was. Buy low, and sell high.

Now is not the time to sell stocks, but it might be the time to buy. If you have some cash to invest, you could likely find some bargains right about now.

If you have a short-term investment horizon, it might be a good idea to take some of your money out of stocks and put it into a CD, but if you’re looking longer term, your best bet is to fasten your seat belt and hold on.

If you know some of your investments are unlikely to recover, it might be time to take the loss and move on, but if your investment strategy was sound before this downtown, there is not much reason to change it now. If the fundamentals of your investments are solid, they will recover when the market recovers.

Our best advice is take some time off from checking your portfolio. Do your best to ignore the financial news and file away those statements from your broker.

One of these days, when the news out of Wall Street starts to look better, you can take another peek at your investments. We’re pretty sure they’ll look better then, and you’ll be glad you didn’t panic when the price was low.