It is during this time that having an investment strategy shines the most – whether it is by Fundamental Analysis or by Technical Analysis. The important thing is that you need to have an educated basis to guide you in achieving your investment goal.
But really, with the market in a steep decline the last several days, is this major cause for concern? For the day traders and short term investors, YES it is. We can only speculate if the SMA 2 will support the price or it will breakdown and test the SMA 3.
But how about the long term investors, should they be concerned? The answer to this is more complex. I wish to share with you two things and you decide what the answer will be for you.
DIVIDENDS AND PAPER LOSS
Remember that there several ways to earn from the stock market. You should also look into the dividends. That’s right. In a bearish sentiment, dividends are most commonly taken for granted. If you are long term holder, also take into account dividend declaration whether stock dividend or cash dividend. Accounting dividends can cancel or lessen your capital depreciation. Dividends are commonly available in blue-chip stocks.
Remember that a loss or a gain is only realized when you SELL your stocks. Otherwise, it’s just paper profit or paper loss. If you are a long term holder, bear in mind that a market cycle always includes recovery.
Happy investing everyone!
By: Ryan Ulysses Cruz
Director of Operations
Biz Whiz Business Training and Consultancy
*Biz Whiz regularly conducts free seminar on Stock Market Investing for Beginners. For more details. please visit the events page.