How To Buy Stocks Online For Beginners

How To Buy Stocks Online

It is easy to learn how to buy stocks online and I will show you how

THE BREXIT VOTE WAS ANOTHER EXAMPLE WHY PANIC SELLING IS A BAD IDEA



The Brexit vote to leave the EU was a shock to investors who proceeded to sell stocks at a furious pace on Friday and Monday of last week. It was a typical panic with 90+% of the media coverage being negative as every scary scenario was paraded in front of investors in both print and television. What made things worse and fueled the selling was that something like this had never happened before and so it was (and still is) impossible for people to figure out what is pure hype /scare tactics and what are more realistic outcomes from this unprecedented vote.
stock panic

Then on a dime, investors apparently decided that maybe this isn’t the beginning of the end of the world and over the rest of last week, the market rebounded nicely to almost fully recover from the two day sell off.

Should You Sell During A Panic?

This was the second panic selling bout investors have had to deal with in 2016, the first being the sudden realization that the Chinese economy might be taking a significant downturn. That selloff to start the year was longer and more severe but just like the Brexit panic, the market came back.

These are great examples why long term investors should think hard before selling into a panic. History shows that more times than not, when investors get that scared that quickly, the subsequent days, weeks, and months will show that the bad news isn’t as bad as initially feared. The stock markets tend to rebound and then, as in the two cases we’ve seen this year, recoup most or all of the losses.

Holding During A Panic Is HARD!

There is no doubt that it is super hard to stay pat with your stocks when everyone is running for the exits. Sometimes its VERY hard. During such times of market panics all the financial news is bad and it gets airtime everywhere you look. Its easy to get caught up in the feeling that the financial world is ending and that makes you want to sell your stocks to get something back. At times like those, selling low and getting something back sure seems better than the alternative of holding and watching your stocks go down more. It often seems like there might be no end to the selling.

Stock market panics are a great illustration why it is best to hold stocks for the term. If your intention is to be in the market for the next 10 to 20 years, it is easier (not easy but easier) to do nothing while other investors freak out. If you hold stocks in good companies that should be able to overcome any short term blips, then there might be no reason to sell.

The bottom line is that it is always hard to know what to do when the market starts going down. Whether it is a panic situation or just a day to day weakening of the market, selling is a temptation that is hard to suppress. But these quick (or relatively quick) bouts of mass panic are the ones that might be best to not get caught up in. To many times you will sell near the bottom and then never buy back in (because you are too scared) when the market heads back up.

Disclaimer: As always, this is my opinion and my opinion only. You should never follow any of my opinions without first consulting a professional money manager or stock broker. This website is for entertainment purposes only. What I write is based on my experiences in buying and selling stocks and may not translate to the experiences you have had or will have.

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