Bad day for Wall Street—bad day for Apple, Inc. (AAPL). Just weeks after purchasing shares at $170, the computer/iPod maker sunk below $140/share in after-hours. After 19 straight quarters of blowout earnings—Apple disappoints. If the highest quality tech companies are warning about future expectations—what does this say about the current state of financial markets?
It says a couple things: Growth will slow (at least in the short-run); consumers will continue to tighten their belts and curb frivolous spending. In addition, companies that don’t report blowout future growth will get pounded. Are we headed for a recession? It certainly appears that way.
Things are bad. No doubt. However, I’m not panicking—and I don’t plan to sell my shares at a loss. Times like these separate the real investors from the amateurs—the resilient and patient veterans from the uptight day traders looking to make a quick buck. If I can give you any advice at this point it’s this:
- Don’t sell your current holdings. Weather the storm.
- Patience is a virtue—do you have any? Those that sell now will likely give up one full years worth of gains—but wait—this is why you dollar-cost average. Continuing to buy now gives you more shares at a lower price. When the index funds/stocks rebound, it’s a double whammy for your portfolio.
- What do you buy now? The whole market. Little by little. The S&P 500 is at a 52-week low. Keep buying. You’ll thank me in 30 years.
I currently own shares of Apple, Inc.
Tuesday, January 22, 2008
What You Should Do Now
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2 comments:
I love when the market tanks for the simple reason that all the kooks come out saying that the world is coming to an end. Ramit Sethi is right, its really entertaining! Let the mindless herd sell, it just leaves more value for the rest of us as we buy our shares at a large discount.
Oh Apple... it does appear that Wall Street's expectations are going to devastate a lot of stocks. Everyone seems to be looking for that "too good to be true" stock, and when it isn't...embrace something. I am fortunate enough to have had a lot of cash from a sell off at a a good time. I am cautious, and buying a little at a time is definitely the best way to go. There is so much volatility, that if you watch everyday, you are just going to be confused as to what drives it each day. Take yesterday's 600 point swing. If you are not comfortable with investing, don't watch what's happening everyday. It will do more harm than good over the long run.
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