October 02, 2008 at 1:00 pm by Tom Lydon
Most investors and advisors had an idea that the bear was coming to Wall Street, so this gave most fair warning to shore up and be prepared, taking necessary steps to protect shares and exchange traded funds (ETFs).
Even before the crisis hit, this year had already handed up losses, and most of the advisors were already roughed up and ready to take on some severity, reports Gary Gordon for ETFExpert. Lo and behold, the buy-and-hold investors took a beating, and after Monday’s 777-point loss, they are probably asking what just happened. These market conditions and past activity are not the rule, it was a one-in-a-million exception.
The asset allocation plan of any buy-and-holder is solid and strong, but not foolproof. With a classic portfolio that is diversified and standard, many invests found themselves trapped; “Too late to find safety, and too early to know what to do next”.
Buy-and-hold investors are in it for the long-term, meaning the peaks and valleys are to be ridden out. And over time, the general trend of the markets are up. But that doesn’t mean you’re bound to this. If the recent volatility becomes too much, by all means, sell a portion of your portfolio, and get back in when the trends are in your favor once again.
Earlier this week, we answered some other questions worried investors might have on their minds, as well.
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November 1st, 2008 at 1:13 am
Are shorts the way to go now and will they stay for awhile with profits in this market-? (eft)ultra _reversal X2
November 3rd, 2008 at 9:01 am
Hi Thomas,
I couldn’t make that prediction, but I think most of the money that was available on the short side has already been made.