Stock Market Freak-Out: Is Now the Time to Panic?

Stocks are down again today, but this isn't the time to panic.

Feb 3, 2014 at 3:30PM

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

The market sell-off continued Monday, and with 30 minutes left in trading the Dow Jones Industrial Average (DJINDICES:^DJI) was down 302 points, or 1.93%. The only real negative data point today is the Institute for Supply Management PMI falling from 56.5% in December to 51.3% last month. But that was enough to give investors reason to sell stocks, and 29 of 30 Dow components are in the red today.

The Dow's one bright spot
The only Dow component moving higher is Pfizer (NYSE:PFE), which is up 1% on news that its breast cancer treatment palbociclib significantly increased patient survival rates in a midstage trial.  

Analysts estimate the drug could peak at $5 billion in annual sales, so this could be a huge opportunity for Pfizer, especially with the Food and Drug Administration giving palbociclib breakthrough status, which will speed up the approval process.

Is this time to panic?
Outside of that lone bright spot, the market is in full freak-out mode. So, should you be selling along with the market today?

It's important to put sell-offs like this in perspective. The Dow has still returned 13% over the past year and earnings season has been solid almost across the board. As of Jan. 31, 74% of the 251 S&P 500 member companies to issue earnings numbers had beaten earnings estimates and 67% had beaten sales estimates. That's no longer enough to get investors to buy stocks; instead they're picking apart any single negative in earnings reports or guidance.

I think what we're seeing is a hangover from last year's market performance, which was driven by multiple expansion, not earnings growth. Expectations got too high and investors were just looking for an excuse to sell-off.

Don't panic over the recent market moves, because fundamentals are still strong. The U.S. economy is growing, earnings are increasing, and unemployment is slowly falling. Those factors will drive the market over the long term, and this sell-off will be a good buying opportunity for investors who can look past the short-term market volatility to find great values.

Buy long-term winners
Looking for a few of those long-term picks? Our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers