Ride out the fall in the stockmarket

Dear Mr Tan



Earlier this year, when the stockmarket was going up, I made some profit by selling the stocks that have gained in value.



With the drop in the stockmarket, I am now holding on to some stocks that have shown some losses. Should I sell the stocks? Will they drop further?



REPLY



If you have invested in blue chips with good fundmentals, you can keep the stocks and wait for their values to recover.



However, you have to bear in mind that some of these stocks have earnings that were partly contributed by the boom conditions. With the excess earnings are removed, these stocks may be over-valued. You may have to consider to sell the over-priced stocks.