Investing advice for those who panic!

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Markets go up, and markets go down; many young investors (myself included) are learning that now. It is easy to turn on CNBC, look at charts and graphs of the major indexes or pick a public company and see that over time if you stay in, you are likely to make a buck or two, but hard to do it. In times like these, it is important to evaluate how well you know your investments. What are the earnings forecasts, and what is the P/E (share price divided by earnings per share)? Are you looking for growth or stable investments? Do you like dividends? What about bonds and indexes?

First, I would suggest holding anything you have unless there is a good reason. Selling causes you to lock in the losses you likely experienced as everything is down. Second I think any individual stocks you invest in you should have a good familiarity with. I invest mainly in banking, energy, and tech, all sectors I follow. Third I think most investors are better off buying passive managed indexed funds. They keep you diversified, they beat most individual investors and actively managed funds, and you can often find ones with low or no fees managed by someone that is tracking and following all the twists and turns of the market. I’m partial to the QQQ S&P index ETF which has had an average of 17% annual return. But I’m also sold on vanguard’s VOO S&P index ETF, it and QQQ have different expenses ratios(keep track of those while usually low or offset by a dividend, those ratios are money you aren’t getting). Next, look at bonds rates are rising yields are better, giving you access to a steady payout. More companies and governments are looking to finance programs and will have to pay you more, take advantage of that. Finally, stay focused on your goals, maintain your disciplined approach, and don’t panic!

Just a reminder, I am not a financial advisor, and you should consult one before making big decisions. I also put some of my previous articles on this subject below.

Basics of investing

Understanding investment

Market volatility

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