HOLD? FOLD?

Whenever gas goes up, stocks go down, or or a celebrity stumbles, the obligatory "man on the street" stories fill the media vacuum.

The Yahoo Finance page offered the following poll to its readers:

In light of the stock market's recent sell-off, what is your current strategy?

Buying 33%
Holding tight 56%
Selling 13%
371576 Votes to date

While not a scientific sample, it is probably fairly representative of the average investor. Holding tight wins by several lengths. But it is the poorest strategy to employ. When prices fall, you sell if you are bearish or buy more if you are bullish. Yet 56% of respondants stand pat and lose capital. Or miss better opportunities (if there are any).

BTW, the Author has some short positions, holding ETFs that are 200& inverse to the S&P 500 and the NASDAQ. For more information on these ETFs and ProShares, see July 10th post, "NEW ETFs ALLOW AVERAGE INVESTOR TO SHORT MAJOR INDICES OR LEVERAGE MAJOR INDICES".

SHOULD YOU STAND ON PRINCIPLE OR PRINCIPAL IN THE DESERT OF THE REAL?

IMPORTANT DISCLAIMER: This blog is offered for informational purposes only. Sources of information provided are believed to be reliable, but are not guaranteed to be complete or without error. Opinions and suggestions are provided with the understanding that readers acting on information contained herein assume all risks involved. The author may or may not buy or sell securities discussed in this newsletter.