I was watching the news Monday night and there was a segment on a local insurance company that is big in the 401k market. The cameras were on the inbound call center and you could hear what the agents were saying to worried investors. The statement that stuck in my mind was "If you sell now, you are only locking in those losses." and if you do a quick Google blog search on "locking in losses", you'll find a number of people saying the same thing. The TV segment was filmed on Monday when the Dow traded between, 10,322 and 9,503. So, would you have been locking in losses or right now as the market closes today (Thursday, Oct. 9) around 8,579, would you be breathing a sigh of relief to be sitting in cash? Now we need a 9-10% rally just to get you back to where you were on Monday. The next question is "Why didn't that same insurance company ramp up their outbound call center a year ago today, when the Dow hit an all time high of 14,164, and tell you to put your money in cash for a while because they expected a correction?" After all, in times like these, everyone keeps telling you that every time there is an bull market, there's always a market correction. Why do they wait till it's down 20% to call it a bear market instead of a market correction? I'm just asking questions here. I've been taking Dramamine and watching CNBC.
On a final note, here's what happened last time we had a 7-day losing streak. This is a time to use your own good judgment and look for safer places to put your money if that's what your gut tells you. The market will do whatever it's going to do with or without you.
