So far this year, the market has been on a roller coaster, especially for tech stocks. For investors who have owned stocks for only a little while, the broad pullback in tech stocks can be unsettling, and may even cause panic. On a Fool Live episode recorded on March 3, Fool contributors Matt Frankel and Brian Withers discuss what you should do when the market is going crazy.
Matthew Frankel: I wanted to hit this question from Hunter before we moved on because it really pertains to this whole discussion. It says: "This tech sell-off looks like it's just getting started. Apple goes off 14 percent off its all-time high and we're bleeding tech down 1, 2, or 3 percent every day. More on that today with a lot these. What do we do? Do we just hold to sell? I'm getting really close to panicking, and you're saying to buy Apple (AAPL 1.45%)."
The one thing I would say, and Brian can chime in on this in a second, too, is that all of these we're talking about from a long-term perspective. These are all companies that we think have a bright future in 5, 10, 15 years. Not because we think the current price is necessarily even a great value or because we want to buy it right now and make money in a month.
I'd say take a step back, figure out which of the stocks that are getting beaten down that you have the most conviction in, and use it as a buying opportunity. Absolutely don't sell just because a stock went down. That's a terrible reason to sell. There are good reasons to sell, like if your original investment thesis doesn't apply any longer. But just because a stock went down is a bad reason to sell, it's a good reason to buy. What do you think, Brian?
Brian Withers: Yeah. I'm suffering the same thing, Hunter. All my stocks are software-as-a-service or e-commerce. Everybody is worried about, at least the market, is worried about what happens when businesses go back to work and the coronavirus gets behind us.
These businesses just, I think all of the ones we'll go through today are becoming stronger and executing well and their business is doing well. As Matt said, my hope is that you are still working and you have regular income coming in. It's tough to say, "Ignore the daily ups and downs." One thing I like to do is look back three months, or look back six months, or look back a year and see where your portfolio has come. Wouldn't be surprised if it's up on any of those measures.
So just continue to buy into the stocks that you have the highest conviction in and be patient. That's some of the hardest things for investors, is to just sit on our hands when the market is going crazy.
Frankel: I've heard that quite a lot of times, that 99 percent of investing is doing nothing. That's definitely true in a market like this.
