Selling too soon carries dangers for stock investors

By Alan Matsuda

POSTED: 01:30 a.m. HST, Aug 14, 2011

~~Question: The stock market recently has been causing a lot of pain as well as panic. Is an individual investor better off selling and waiting for things to calm down, buying more shares at a lower price or just riding it out?
Answer: The typical individual investor is better off "just riding it out." As the poet said, "This, too, will pass." The big dangers in selling now in this big dip and buying later are that: a) it's too late to sell -- unless you predict an imminent worldwide depression, and b) goofing big time in your timing to buy back into the stock market. If you have cash, as some cagey, old investors do, now's a good time to make some buys.
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Question: The stock market recently has been causing a lot of pain as well as panic. Is an individual investor better off selling and waiting for things to calm down, buying more shares at a lower price or just riding it out?

Answer: The typical individual investor is better off "just riding it out." As the poet said, "This, too, will pass." The big dangers in selling now in this big dip and buying later are that: a) it's too late to sell -- unless you predict an imminent worldwide depression, and b) goofing big time in your timing to buy back into the stock market. If you have cash, as some cagey, old investors do, now's a good time to make some buys. Login for more...