The Australian sharemarket is a sea of red again today.
In what can be described as a 'bloodbath', the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) plunged 2.3% shortly after the market opened, reversing much of last week's gains, as investors read into the US Federal Reserve's decision to leave interest rates unchanged.
On the one hand, investors wanted the Fed to keep interest rates down. But on the other, many investors were desperate for a sign that the US economy truly was in recovery mode, which would have been reflected by an increase in interest rates for the first time in nearly a decade. Instead, the Fed's chair, Janet Yellen, expressed her concerns regarding the global economy, resulting in a very skittish market.
To make matters worse, oil prices took a dive during the latest session which is causing havoc in Australia's energy sector. Woodside Petroleum Limited (ASX: WPL) and Santos Ltd (ASX: STO) fell 3.4% each while BHP Billiton Limited (ASX: BHP) and Origin Energy Ltd (ASX: ORG) were down 3.1% and 5.2%, respectively.
The banks didn't provide any support, either. All four of the major banks fell in excess of 2%, with Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) hit the hardest, down 2.7% and 2.8%, respectively.
Elsewhere, Rio Tinto Limited (ASX: RIO) was down 3.2%, Telstra Corporation Ltd (ASX: TLS) lost 2.1% and Wesfarmers Ltd (ASX: WES) dropped 1.6%.
Indeed, it's easy to become scared and panicked on days like today. These are also the days where many investors lose the most money – not because their portfolio's fall in value, but because some investors sell into the panic, thus locking in their losses. As scary as it may be, it is vital that investors maintain their composure and keep their emotions in check.
Remember: These days are a normal part of investing. They will pass, and there will be brighter times ahead for the disciplined investor.
