Fools don't care for 'market crashes', like the S&P/ASX 200 (Index: ^AJXO) (ASX: XJO) 'crash' of nearly 2% this morning.
That's because (capital-F) Fools own businesses — not stocks. The distinction is imperative.
Like a homeowner, you wouldn't panic sell if the Reserve Bank of Australia failed to lower interest rates. But that's exactly what fickle sharemarket investors are doing today.
Overnight, European Central Bank (ECB), "action disappointed investors", according to the Fairfax Press. The ECB increased and extended its stimulus measures in an effort to boost the struggling economies of Europe, but it would seem investors were expecting more.
Given the choice, I'd rather a healthy economy than one that requires more stimulus. Unfortunately, I also like to think of myself as a rational investor.
Back in Australia, it seems only fair then, that the best companies have their share prices cut 1%, 2% or 3% as a result of the ECB's decision doesn't it? How dare the ECB forget to stimulate the pockets of Australia's share market day traders and doomsayers.
3 buy chips to buy
Fortunately, Fools don't care for market crashes, or what the ECB did overnight. Instead, we'll use the downtrend to buy shares of great dividend-paying blue chip stocks, such as those below:
- Wesfarmers Ltd (ASX: WES). Investors can buy shares of Wesfarmers, the owner of Coles, Bunnings Warehouse, Officeworks, Kmart and more for 1.5% less today thanks to the hysteria. The Wesfarmers stock price has fallen 7.5% since June, and could present a worthwhile entry point for long-term investors.
- Telstra Corporation Ltd (ASX: TLS). Telstra shares fell 2% this morning and are down 10% in six months. Investors appear to be overlooking Telstra's reputation as one of the country's best dividend stocks and its bright long-term future as Australia's leading telecommunications company.
- ResMed Inc. (CHESS) (ASX: RMD). The ASX-listed shares (ResMed shares are also found on the NYSE) fell over 3.3% this morning as investors reacted to falls in US shares overnight. However, the share price says nothing for the underlying business of ResMed Inc, a $10 billion biotechnology business growing steadily in world markets.
Buy, Hold or Sell?
Investors should make a pact with themselves to never buy a stock when it rises and never sell a stock after it's fallen. This simple strategy will work wonders for your temperament as a long-term investor.
Each of the above companies could be worthy additions to long-term investors' portfolios, in my opinion.
