Hi, I guess the title would have surely touched the financial nerve of many investors that would be been pulsating wildly when the market was at its very best. No doubt the rally enjoyed in the past resulted in a number of investors making good money. This resulted in even those who didn’t have any know-how of equities to buy stocks without any major insight on how the investing cycle works.
The above question would have been playing numerous times on the minds of such investors who would have purchased shares of non-established companies in huge numbers. Thus I am sure even today they would wonder why they did purchase them in the first place. What started as an emotional reaction responding to market sentiment, is indeed today a cause for worry for many who are in ownership of stocks that should have been not been picked in the first place.
However, answering the question, in my perspective it depends on the portfolio of stocks you have. If they are the ones from blue chip companies that are rated well, there is no reason to worry as the current cycle is just a trough phase and in the near future the crest will surely occur and one just needs to be patient.
However if your basket is filled with stocks and shares that should not have been purchased in the first place itself then it’s better to do away with them before more damage is done to your portfolio. Investing in stocks is not child’s play and one would really burn one’s fingers if he invests callously following the herd mentality or falling prey to enticing promotional advertisements.
The wise investors are the ones who before investing spend adequate time reading and analyzing growth patterns of the companies they are choosing to invest in from a stock market perspective.
Coming specifically to equity, no doubt it’s the hardest hit product due to market volatility. and those with a heavy component of equity products in their portfolio should look at rebalancing their portfolio and do away with equity stocks of companies whose credentials indicate that they have been faring well very badly for successive quarters.
So in conclusion the title question can be answered in different ways depending on the basket of stocks and shares that compromise your financial portfolio. One should not hesitate towards spending time identifying a good financial planner who could assist in revising his financial portfolio and ensure that the individual is in track to achieve his or her financial goals.
1. Views as are mentioned in the article are personal views of Author and nothing to link with Co. , its Director and Employees.
2. All investments are subject to market risk and you need to consult your financial advisor/consultant before investment.