No back and forth because of the ups and downs on the stock markets

The concentrated load of negative news is of course extremely bad for the economy and the best thing to do is to sell all your shares immediately. At least that’s what Gonzo_8953 says on Twitter. And he must know, after all he has 17 followers.

But seriously, the warnings of a crash have now become quite loud. Being bearish has become the order of the day: now all those neatly coiffed bank strategists are once again looking into the cameras with worried faces and declaring in sonorous voices that they expect the markets to remain volatile and that we should act with caution. What a realization – the markets fluctuate! And they are being paid handsomely for this wisdom. But why are the experts only issuing warnings now, after prices have already fallen?

Don’t get me wrong: I don’t want to sugarcoat anything. The environment has become pretty nasty and I also find the correction only partially pleasing. But that is simply part of investing. After years of a continuous upward trend in which everyone and their dog (and even my brother-in-law) was able to make money on the stock markets, it is now becoming a little more difficult to achieve returns.
Stocks that were cheered to the skies in the euphoria have corrected brutally. The “disruptive” bicycle company Peloton (-90 % from its record high), the video conferencing provider Zoom (-82 %), the cinema chain AMC (-76 %) and many other gambler stocks have plummeted back down again as quickly as they shot up, tearing a big hole in many investors’ portfolios. But you and I know that these stocks are not for serious, long-term investors. Not even after the correction.

The good thing about the current uncertainty, however, is that it is unearthing more and more bargains. Isn’t it great that I can now add to a high-quality growth stock like Logitech at a price/earnings (P/E) ratio of 15? Or a Holcim, which pays a tax-free dividend yield of 4.6 %, at a P/E ratio of 13? If Mr. Market gets depressed and offers me solid shares at sell-off prices, I’ll gladly take them.

And what do you think, are shares riskier now that they have corrected or at the peak of last year? So my tip: don’t let the ups and downs on the stock markets tempt you into a hectic back and forth with your shares. This only pleases the banks – and their neat strategists – who make money every time.

With this in mind, keep calm and stay true to your investment strategy!

Yours, Mark Stock©

Mark Stock is a member of the Point Capital editorial team. “I am a stock market enthusiast and am passionate about economic history. I have been following the ups and downs of the markets for years and, of course, invest myself – preferably in shares. So my name says it all. Every month, I take up what I consider to be an exciting topic. And since the focus is on the content and not on me personally, I write under a pseudonym.”