There is a lot uncertainty with all of the share volatility going on due to the coronavirus outbreak.
How are you supposed to remain calm when the share market is falling so heavily week after week? How are you supposed to decide when to buy?
One thing is for sure, you don't need to panic.
Keep things in perspective
A share is not just a little stock code that you find on the internet. It represents your portion of ownership of a business. All those businesses still exist.
Whilst it's a lot emptier, Sydney Airport Holdings Pty Ltd (ASX: SYD) is still there. Qantas Airways Limited (ASX: QAN) is grounding a lot of planes, but they will be ready to go when the passenger demand returns.
The Australian property market may look a bit uncertain right now, but REA Group Limited (ASX: REA) will continue to earn its property advertisement fee for many years to come.
There is a lot of pain out there in certain industries, particularly in areas like travel.
However, to steal a saying, it's only the people who get off during a rollercoaster that get hurt. In other words, share prices are down now, but that doesn't mean that share prices will be down in a year or three years from now. You haven't 'lost' money unless you sell it, assuming most things will bounce back later this year or ntext year. Would you sell your shares because they dropped 25%?
Imagine you bought your dream house for $1 million. Would you sell it for $750,000 a few weeks later just because someone offered a lower price for it?
The share market trading price is not how much your share is actually worth. it has a fundamental long-term value, which probably hasn't dropped 25% over the past month.
Volatility is a good thing. It shows that the market is made up of different buyers and sellers each day. If you want to sell your shares you can do it at any point in the opening hours during the week. You don't have to take those offers for your shares, it just shows there are buyers.
And even better, the share market shows you can buy shares whenever you want for the offered price. Market participants are selling their shares for a lot lower than they were just under a month ago.
Are these share prices opportunities?
I think so. It could fall further, but the best time to invest is when the whole market is fearful.
Imagine if I could give you $100,000 and you could choose to invest in the share market during any point over the past 15 years. You're probably going to choose during the GFC because that's when investors were really fearful and share prices were the cheapest.
I don't have a time machine. But the share market is rapidly losing ground. We are being given another opportunity to buy shares at much cheaper prices. I think it's a great opportunity to buy shares to help accelerate your long-term wealth.
