Wednesday, October 8, 2008

DO NOT PANIC SELL: Investor panic despite Central Banks' Intervention

My Portfolio :
(6.41% of portfolio) DGTL - 24.21%
(9.53% of portfolio) FLI -16.44%
(50.46% of portfolio) MEG -15.16%
(6.31% of portfolio) SMB -18.64%
(27.29% of portfolio) SMDC +4.54%

So you've seen/heard the news, almost all central bank of almost all countries had tried to bailout the financial sector. However, instead of helping the economy it increased investor panic.

I'm tempted a couple of times to cut my losses and sell of my remaining equity at a loss of more than 15%, but I won't. Instead I'll make sure that I have enough capital, that when the worst is over, I'll have enough to buy back my losses.

My opinion is that a companies stock price does not reflect its performance. (The stock market is just a means for a company to easily raise capital). Thus, as long as you're not betting on the financial sector, and the company you are betting has a healthy financial statement, then there should not be anything to worry about.


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