No bull market lasts forever, but investors can no longer ignore the stock market. What to do when share prices fall: Tips for the brave, the fearful and the pragmatist.
AThere is a certain amount of unrest in the stock markets, but no mood of crisis. Furthermore, the view is widespread there that the central banks could simply dispel all uncertainties about economic development in the world by easing monetary policy. In the bond markets, on the other hand, investors are less naive: The very low yields on bonds also express the conviction of declining economic growth – and thus a low belief in the ability of the central banks to insure the world economy against political nonsense.
The acid test for every shareholder comes when prices fall. Everyone can look forward to rising prices and dividends, but when prices move south, even otherwise sober contemporaries get restless. Especially since with every price decline, the voices of those catastrophe economists and other businessmen with the misfortune grow louder who predict at least one serious crisis with impoverishment, if not the downfall of our economic and monetary system. In the face of shaky share prices, it is not only private investors that are worried, but also some large investors. And large investors tend to make the same mistakes as private investors.