Sell or hold share dilemma

Mercury (Hobart) - Property - - Finance And Conveyancing -

An­thony Keane DOESan un­easy feel­ing of deja vu in the share mar­ket worry you that a big­ger, scarier ver­sion of the global fi­nan­cial cri­sis is on the way?

Since April our share mar­ket has slumped more than 8 per cent and­many of our big­gest com­pa­nies in­clud­ing ANZ, West­pac andBHPBil­li­ton are down more than 10 per cent. In­vestors are clearly ner­vous. Euro­pean economies look cac­tus and the unem­ployed masses there are protest­ing, North Africa and the Mid­dle East ap­pear to be im­plod­ing, the mas­sive debt of theUS threat­ens to drown it. There are even wor­ries that China, our eco­nomic saviour of the past decade, could fal­ter.

So what do you do? Do you sell or re­duce your share in­vest­ments, or do you buy up big in the be­lief that stocks are at bar­gain-base­ment prices?

Only a gutsy few would go on a share-buy­ing spree amid all this un­cer­tainty, while­many in­vestors, still smart­ing from the pain of 2008, would be tempted to sell.

I reckon you need to stick to your long-term in­vest­ment plan. Of course, you need a plan first.

My­plan was to in­vest heav­ily in shares dur­ing the 2008 down­turn and hold on to them for at least a decade. Un­for­tu­nately, I went in too early dur­ing the down­turn, lost a bun­dle an­damstill wait­ing for it to get back to the start­ing point.

The All Or­di­nar­ies In­dex still needs to climb an­other 48 per cent to get back to its 2007 record high, and an­a­lysts say this­may­take any­where be­tween three years and nine years. Ob­vi­ously, it will re­quire pa­tience by in­vestors.

Dur­ing the re­cov­ery from the global fi­nan­cial cri­sis, our mar­ket has ab­sorbed Euro­pean debt prob­lems, global po­lit­i­cal up­heaval, and nat­u­ral catas­tro­phes. All re­cov­er­ies have cor­rec­tions, and JuneAu­gust is a tra­di­tional time of weak­ness as the north­ern hemi­sphere goes on hol­i­days.

No­body knows what the fu­ture holds, so ask your­self what scares you most: an­other mar­ket crash or re­gret­ting that you sold out when the

WOR­RIES: An in­vestor pon­ders the mar­ket.

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