2018 has not been kind to stock investors. Most stock market indices around the world have declined substantially this year.
At the time of writing, the US broad market index, the S&P 500 index is down around 7%, while our local stock market barometer, the Straits Times Index (SGX:^STI), has shed some 10% of its value since the turn of the year.
With stock markets as a whole down, it is very likely that individual investors would have experienced portfolio losses as well.
However, at such a time, it is important that investors do not get disheartened. With that in mind, I thought it would be useful to share three inspirational quotes that should keep us motivated to continue investing during this difficult period.
“Cash combined with courage in a time of crisis is priceless.” – Warren Buffett
While the length of a stock market downswing is often unknown, one thing is certain – stocks will eventually recover over time.
Warren Buffett advocates buying shares when the market is down. Instead of shying away from stocks during a bear market, investors who have the cash should be looking to buy more shares. Investors who can shake off the fear during a bear market should be handsomely rewarded when the market eventually recovers.
“Do not take yearly results too seriously. Instead focus on four or five-year averages.” –Benjamin Graham
Investing is for the long-term.
Investors should not be disheartened simply because they made losses over a year. In fact, it is fairly common to see market downturns over a single year time frame. The odds of making a loss in the Straits Times Index between May 1992 and January 2016 over a single year was 42%. However, the index has never made a loss over any 20-year period.
As such, investors need to have the resolve to hold on to their shares to last the distance.
“I’ve found that when the market’s down and you buy funds wisely, at some point in the future you will be happy. You won’t get there by reading ‘Now is the time to buy’.” – Peter Lynch
Legendary investor, Peter Lynch perhaps summed it up best. There are numerous articles stating that the best time to buy is during a market downturn. This is especially so, with the proliferation of the internet and the ability to read news articles at the click of a button.
However, if we do not act on Lynch’s advice, we may very well miss out on a great buying opportunity like now.
The Foolish bottom line
While it is easy to get disheartened during a time of crisis, a market crisis is the perfect time to buy more shares in the companies we like. Investors who are feeling down and unsure of what to do during this period should try to remember these three incredible quotes. Hopefully, they will inspire us to make the right decisions and to capitalise on the opportunity afforded to us.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.