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Roundtable: Panic, Sell, or Panic-Sell?

Earlier this week, The Wall Street Journal reported that workplace retirement plans -- primarily 401(k)s -- have lost $2 trillion over the past 15 months.

And that doesn't include yesterday's 7% drop.

Anyone who has glanced at the headlines or turned on the TV in recent days has seen the stock market leading the news. The S&P 500 and Dow Jones Industrial Average are down 40% from their year-ago highs. This ain't just a bear market. It's a grizzly bear market.

Commence forehead-slapping
Before you go jumping into a refrigerator to wait out the nuclear market, remember that the truly great investors -- Buffett, Lynch, Templeton -- encountered periods of euphoria and despair, of profit and of panic. Although their investing strategies may differ, their temperaments are remarkably similar.

Indeed, here at The Motley Fool, we believe that behind every successful investor you'll find three traits:

  • Patience.
  • Discipline.
  • Perspective.

Don't get us wrong, though: We're not suggesting you bury your heads in the sand. Stay educated, keep tabs on the businesses you own (or want to own), and stay Foolish. To help you keep focused on those goals, and to give you the knowledge and courage to stay cool in a time of market chaos, we asked a panel of Motley Fool advisors and analysts about the recent market turmoil. Follow the links below for in-depth advice on the following topics:

Read about the Fool's disclosure policy.

Read/Post Comments (8) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 10, 2008, at 5:56 PM, Dtm1939 wrote:

    We are not headed for a depression. I really do not understand why anyone would sell in this market. I am buying bargains. I will continue to do so.

  • Report this Comment On October 10, 2008, at 6:03 PM, radarlen wrote:

    maybe it is time to panic--the government, business world, financial world, the media, academia, and politicians have ALL behaved woefully. The idea of integrity seems like a naive outdated idea and has been replaced with greed and self indulgence. Is ther e anyone of integrity left in this world of avarice? Is there any leader that can rise above pettiness and display courage--i dont think so--no one has balls...

  • Report this Comment On October 10, 2008, at 6:18 PM, Dtm1939 wrote:

    Do not bank on leaders to display courage.

    That is not what is necessary. What is needed is for all of us to ignore the lack of faith in our fellow citizens. If we all keep our heads and don't run for the exits we will be fine. The bums that started this rout will be begging the rest of us for our resources.

  • Report this Comment On October 10, 2008, at 6:37 PM, StocksBuyorSell wrote:

    Americans are still knee deep in credit card debt. That has to change before the market can start to grow again. There could still be more fall out coming...

  • Report this Comment On October 10, 2008, at 6:41 PM, GoNuke wrote:

    Individual investors are panicking. They are redeeming mutual funds at a fantastic rate forcing the funds to dump assets at fire sale rates. Hedge funds are being forced to do the same. At some point people will stop rushing to redeem their remaining mutual funds and the market will rebound somewhat.

    Then all the cash that has been poured into T-bills will start to migrate back towards the stock market. As it inches up the people who fled in fear will return in fear of missing the market rebound.

    It won't return to previous levels for some time but remember that baby boomers are nearing retirement age and they haven't saved enough. They will view the stock market as being their best hope for increasing their wealth.

    The banks must be bailed out. Few if any can meet their capital adequacy ratios now. To get this crisis over with we need massive infusion of Tier 1 capital into banks. My fear is that good companies might fail for lack of short term credit. The banks are insolvent and that is creating a liquidity problem that could kill our investments.

  • Report this Comment On October 11, 2008, at 7:48 AM, BelgianFred wrote:

    I keep on wondering how people can consider the current valuations as 'compelling' or a 'once-in-a-lifetime opportunity.' Based on the 10-year trailing P/E, adjusted for inflation, the stock market now (after the crash in the last few days) is 'fairly' valued. But it still has a lot to go (down) before it will really be in bargain territory...

    Note that the 10-year trailing P/E is one of the best measures for the valuation of a market as it corrects for (unsustainably) high profit margins...

  • Report this Comment On October 12, 2008, at 10:05 AM, buck80kid wrote:

    in the words of Hockey great, Mickey Redmond...this is no place for a nervous person.

    I am grateful for the calmer messages that have come out of the Fool throughout the week.

  • Report this Comment On October 13, 2008, at 10:20 PM, pedorrero wrote:

    The fact that in less than the past month, the market has set two dubious records: the worst week since 1937, and today (10/13) the biggest one day gain since 1933. Both of these records were in the midst of the Great Depression. Even back then the government was meddling in the economy, though not on the scale seen in 2008. Lighten up while you can.

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