Monday’s sharp decline in stock prices wasn’t entirely unexpected, but it was unusually severe and came after one of the most volatile weeks for stocks since the fall of 2008.
Is it too late to sell or too early to buy? Should investors hunker down or hold out? Below are comments from local investment experts.
Don’t buy just yet
Though signs of panic and capitulation abound, that doesn’t mean the market will automatically go up. Investors lucky enough to be holding cash should be patient about reinvesting it and be open to the idea that a “buyable” bottom will occur between now and Halloween.
Andre Ratkai, Praxis Advisory Group
Know your risk tolerance
As we tell our clients in good times and bad, know your risk. How much can you stand to be down in a portfolio and still sleep at night? Define both long-term and short-term goals so that on days like this, you know that your investments are designed to serve those two goals and are positioned to reflect your immediate and your long-term needs.
Last and most important, be patient and positive. Markets like these also create opportunities for long-term positive results.
Christine DeRose, RBC Wealth Management
Defensive picks
While no traditional asset class has performed well during the past two weeks, I would look to add exposure to the following areas:
• Consumer staples and defensive stocks, such as Coca-Cola, Dr Pepper Snapple and Merck. Or you could use a diversified exchange-traded fund like the Vanguard Consumer Staples Fund.
• High-growth stocks with enough earnings power to weather a slowing economy, such as Apple, Caterpillar or Chipotle. Or you could use an exchange- traded fund like the Rydex S&P MidCap 400 Pure Growth Fund.
• International bonds like Templeton Global Income Fund, and Pacific Rim equities, like the Matthews Pacific Tiger Fund.
Dave Twibell,
Custom Portfolio Group
