The sky is falling!
Stop. To steal a line from Cameron Crowe's 1989 Say Anything: "You must chill. You must chill."
Yes, I understand that pretty much every market average fell more than 3% on Friday. ExxonMobil
Yet if you're reading this, it means I'm still typing. I haven't jumped out of any windows. (Not that it would help matters any. I'm on the ground floor.) That sort of dramatic overreaction doesn't help. Panicking as your stocks plummet won't slow their fall, and it won't salvage your portfolio -- just lock in your losses.
Well, what should we do?
You should be grateful for today's object lesson in the volatility of the markets.
From time to time, we all need to be reminded that asset prices can go down as well as up. Otherwise, we might do something stupid -- like, say, pay more than 300 times earnings for a share of SunPower
Hypothetically speaking, and present company excluded, of course.
No, no -- what should we do about the stock market?
Oh, right. Well, just keep on doing what you've been doing. I did say "present company excluded," right? So keep collecting and depositing your paychecks. Researching high-quality, low-price stocks. Buying shares at a significant margin of safety. And purchasing no more of any given stock than you can afford to lose. (Because we all make mistakes from time to time.)
Once you've got that down, though, it's time to get greedy.
Greed is good
See the opening lines of this column up above? A lot of investors are saying things like that right now. Even the pros are panicking. The hedge-fund types? They're worrying about making their quarterly numbers, and they're selling out of positions they love, in a frantic attempt to stanch the bleeding.
Meanwhile, you should consult your stock "wish list" -- you've drawn one up, right? -- and see whether today's panic selling has pushed any of your favorite stocks down below your hoped-for buy-in price. Today just might be your lucky day.
In short, while the so-called Wise Men on Wall Street are busy selling their favorite stocks, you should be marshalling your pennies, updating your buy list, and deciding how far Coca-Cola
Further fearless Foolishness: