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You Are Not Alone: Thoughts from the Foolish Community for Stock Market Downturns

2016 has been rough for the Singapore investor.

As of its close yesterday, the Straits Times Index (SGX: ^STI) is down almost 12% since the end of 2015. Other markets around the world have not been spared either. In the U.S., the NASDAQ index has experienced a steep 14.5% decline over the same timeframe.

It is good to surround ourselves with level-headed investors in times of distress such as now. Hanging out with the Foolish community is one way to go about it. To help you along in coping with steep falls in the stock market, below are two tips I had picked out from our Foolish community in the U.S.

Cloudy, with a chance of rain

“Fear can make a whole lot of things that aren’t actually true seem plausible.”

– member Stan8331

The decline in the stock market makes it easier for us to imagine terrible scenarios for our companies.

For instance, fear may cause us to imagine that a recession is around the corner and that our companies will suffer as a result. If we paint the stock market with a broad brush, we may overlook the fact that companies such as Straco Corporation Ltd (SGX: S85) had actually grown its revenue and profit by over 20% in its latest reporting quarter.

So, we may want to continue focusing on what’s actually happening with the underlying businesses of our stocks despite the pessimistic mood which may be choking the air at the moment.

It’s worth pointing out that a falling market does not imply that all companies are doing terribly. Finding a company with a fall in its stock price despite a well-performing business could be a good place to start bargain hunting.

The value of slowing down

“In the past when I felt stressed, when seemed my stocks weren’t doing well and each one I added immediately went down, I stopped investing. I waited, watched and studied, and allowed my cash cushion to build up.

By the time I saved enough money to feel comfortable again, the market had completely recovered or it was down further and I was really looking at good bargains. If it was the latter, I started to buy, the best companies at the best price I could find, but slowly.”

– member TMF1000

Keeping a calm mind is critical in investing.

If you feel stressed out by the market drop, there is no harm in slowing down and letting your savings build up. It can also be good to have a time-out from daily stock market movements. This allows us some quiet time to identify the best long-term investing opportunities or to study new companies.

Once you are ready, as Motley Fool member TMF1000 notes, you may be better prepared, mentally and financially, to buy stocks – and build wealth.

For more investing tips from the Foolish community, sign up here for your FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock SingaporeIt will teach you how you can grow your wealth in the years ahead.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.