2018 was raked by numerous political and economic tensions whose end result was tipped market and dismally performing stocks. On 4th December, most stocks took a hit with some of their prices falling to historical lows that sent most investors to a near panic mode. While they are yet to figure out the immediate cause of the market tumble, most associate it with the recent global events like the mid-term elections, and unpredictable China- U.S relations. But how should investors react to these failing stock prices? Do you sell or wait for the market conditions to improve? Here is Sandy Chin’s advice on how to react to these changing markets:
- Remain calm and avoid hasty decisions
Technology stocks fell in the most affected categories with some like Apple falling to record lows. What do you do if a significant portion of your investment is tied in apple stocks? Do you sell them sell them off to avoid possible further losses? Sandy Chin believes that the fact that they have hit all-time lows means that they are less likely to shrink further. Remaining calm and watching them bounce back as they do might, therefore, be the wiser move.
- Research on the history of your invested stock
Sandy chin notes that markets have always been susceptible to political and economic tensions. This explains the great depression of 1929, the dot-com bubble burst at the beginning of the millennium and the most recent real estate crisis in 2008.
She is, however, quick to add that it has always found a way of recovering from these situations. Chin is also a strict adherer of the history repeats itself line of thinking. She, therefore, holds the opinion that by studying the historical performances of thee stocks and their reaction to market turbulence, you get a better idea on how long it takes for your invested stock to bounce back to healthy trading prices.
- Consult more experienced traders
In addition to studying the stocks, you have to understand the markets by listening to more opinions from experienced traders. Pay particular attention to their market forecasts, however, dissenting these opinions may seem. But most importantly, consult with as many experts as possible as this helps you gain a better understanding of the market.
Sandy Chin, however, argues that industry expertise and experience shouldn’t be tied to the years a perceived trader has in the trade. She argues that there are several young traders out there with more accurate interpretations of the market and whose opinions shouldn’t be cast aside as soon they dissent from the veteran’s point of view.