Financial markets worldwide traded broadly lower in the month on August, which caused by the concerns over the health of US economy and Euro zone debt crisis. Now, I realize that we are actually experiencing nothing more than a correction. So, many believe that what had happen currently is not a bear market but just a correction. And, it will end very soon.
However, nobody will know the future. You must remember that anyone who tells you that he is absolutely certain that it’s a correction or the beginning of a bear market, then he is actually lying you.
It’s advisable to have a systematic approach on how to deal ahead with this kind of sell-off situations. At times when the markets tumbled, try not to feel panic and you should act something to your investment portfolio. You also need to have a set of principles for yourself so that you won’t act based on emotion.
The crucial part of investing is to always stay comfortable with the amount of risk that you are taking. This is the principle that investor need to apply no matter what’s happening in the stock market.