Over the past month
global stock markets and the Johannesburg Stock All Share index has declined by
+/- 32%. Of course we are very concerned about declines in the share markets.
Investment losses are always concerning! We realise that investors
throughout the world are anxious and fearful. We are anxious too! Our
investments are aligned with those of our clients and we experience the anxiety
too. However investors do not make losses until such time as they decide to
give up and sell.
In the last week we have only had two requests to sell
out of investments. We disagreed with both these decisions. Over the years we
have been at pains to explain to clients that it is irrational to buy when the
price of an investment is high and to sell when the price of the investment is
low! Decisions investors make now will determine the outcome of their medium to
long term goals.
Amidst the turmoil and stress of the Coronavirus crisis and the financial markets crisis investors need to keep cools heads. Investors need to think clearly and make rational decisions rather than decisions based on their emotions.
Remember…
Don’t Panic! Stick to your investment plan.
Don’t buy high and sell low. This is irrational and guarantees losses! It is the worst thing that you could do!
Ignore all the “hype” and commentaries by people who really do not understand the stock markets.
“The time of maximum pessimism is the best time to buy and the time of maximum optimism is the best time to sell.” Sir John Templeton.
