To say that August to September was not a kind period to stock markets would be something of an understatement. Stock markets in turmoil, trillions being wiped off the very face of existing and on-going uncertainty brought about a period that was as depressing as it was terrifying. Of course, optimists would argue that the worst has now passed and the modest forward-movement since October got underway is a sign of progress…albeit rather slow and inconsistent.
Unfortunately, there are also those with a slightly more ‘doomy and gloomy’ forecast for the immediate weeks ahead – predictions that can only be described as akin to a doomsday scenario. In a financial capacity anyway, as while there’s not specific evidence to suggest anything’s going to happen, October has historically been the worst month of the year for the biggest and most damaging stock market crashes in history. Financial panic just seems to come hand in hand with this time of year, breeding bad decision making and rash judgements. Nevertheless, with no less than nine of the 16 worst one-day percentage plummets in history having come about in October, it’s easy to see why so many are panicking once again.
A Real Threat?
As already mentioned, the fact that October seems to be such a terrible month as far as the stock markets are concerned doesn’t necessarily mean we’re in for a repeat episode this year. Nevertheless, the events of September and the on-going downward picture on the right-hand side of the chart has made it impossible to rule anything out – investors are very much on their haunches and primed for potential problems.
In terms of what investors at all levels can do to get by during these times of market volatility, some of the most experienced experts the industry has ever seen recently shared their thoughts and opinions with Money Observer – including the following:
- Avoid the temptation to sell during times of market panic, as doing so more often than not simply results in a ‘locked in’ loss. The advice is therefore to do the contrary – remove all emotion from the equation and sell when it is right to sell.
- Being overly clever is also something that is recommended against touring these kinds of turbulent times. The simple fact of the matter is that predicting the kinds of sectors or assets that will perform strongest with any kind of consistency is something nobody can do. As such, common sense dictates that it is a much better idea to hedge your bets – consider cash, property, fixed interest assets and equities for a more even spread.
- Last but not least, one of the most important bad habits to avoid at all costs is that of overly buying into daily speculation and commentary which can in so many instances prove to be counterproductive. If you are investing with your own long-term interests and targets in mind, this is the kind of often temporary daily noise that can cloud your judgement and push you in the wrong direction.