No one can be sure that July 2008 will be any better for the stock market than the previous month. Matters are not as bad in Brazil and Russia, but they too cannot remain free of the sentiment that sweeps North America, China, and major stock exchanges everywhere in the world.
Acute financial distress adds destructive energies to frenzied worries. Day-trading has always been a stressful affair. Now, the plushest corridors of long-term investors are unstable as well. Premature stock exits and stop losses on derivatives may cause unnecessary distress. A calm mind helps to pull a financial portfolio out of a tail-spin. Psychiatrists can provide counsel and medication. However, there are some management steps to take as well.
Step one is to make a cash-flow budget. Sacrifices to stay afloat should not be at the cost of confidence in the fundamental strengths of the U.S. economy. The budget should be reviewed often because inflation and recession trends may demand immediate responses.
It is easy to forget the truism that a bear phase turns up top stocks at unprecedented bargains. It is best to follow management teams with the professionalism to offer Forward Price to Earnings Ratios. Investors must do their own math if guidance-statements are not forthcoming.
Sharing distress reduces emotional burdens. Executives and all classes of stock investors should share ideas. Counseling a peer can bring the peace of reason to your own mind. Hopefully, we will all be able to look back on this phase of stock exchange history with relief and amusement soon.
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