It is normal for investors to feel a little depressed after seeing their portfolio value drop, as during the August 5 sell-off. But there is a lot to do to feel better and position yourself better for the next time the market slides.
In particular, there are three things you can do right away to compensate for some of the blues sell-off.
1. Pause
The first thing you should do if you feel upset about the red numbers in your wallet is to step back, pause and commit to doing nothing in a hurry with your investments. Things rarely go as bad as they seem.
More importantly, impulsively selling your shares during a sell-off or panic often means selling at a loss or cutting you out of the possibility of future earnings. It’s also a bad form.
Even if you’re not panicking, depression after experiencing financial losses is not to joke with. Close your browser window and take a walk. Decisions taken immediately after a withdrawal are more likely to be short-sighted than preventive.
2. Evaluate the situationThe next thing you need to do is have a perspective on what happened, which of your investments are actually affected and why. This will determine your strategy to act – and the calculated action is a strong defense against depression.
3. Find the right opportunity for the moment, then act on it
Here’s the last thing to do if you have blues sell-off: use the clear space you got with the pause and awareness of the situation you built by examining the situation, to determine how to exploit the conditions of the sell-off.
