Business Week counsels investors: Don't panic

The Ticker


Do you panic in a bad market, and dump your blue-chip stocks? Not so fast.

Business Week says, "Keep a cool head in a bear market. Here's why you shouldn't panic:

"Smart-money players are waiting to scoop up your shares at a bargain price. Don't fall into that trap. "Markets often snap back within several weeks after a sharp sell-off. If you panic you may wind up rebuying your stock at a higher price.

"If you sell at a gain you'll pay taxes -- money that could otherwise earn more money in the future."

If you are considering retiring, here are "Retirement-Saving Guidelines" from Black Enterprise:

"Keep an emergency fund, a stash of six to nine months' of living expenses. ... Don't neglect IRAs; you may contribute up to $2,000 a year in pre-tax money in a traditional IRA, same for a Roth IRA with liberal withdrawal provisions. ... Check into annuities, stocks and mutual funds."

TAX TIP: "If you received a refund, consider lowering your withholding rate. Why let the government have an interest-free loan with your money?" (Tax Hotline, May)

WALL STREET WATCH: "For a decade the biggest risk was to be out of the market. Now it may be an even bigger risk to be in it." (Sheldon Jacobs, editor, No-Load Fund Investor)

"Remain heavily committed to stocks. This is still very much a growth economy, and the only way to benefit from growth is by investing in stocks." (Abraham Gulkowitz, global strategist)

"Take some money off the table now. Lock in profits in tech stocks that still have high valuations. Put that capital to work in undervalued low fliers." (David Dreman, money manager)

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