Do I buy stock, or do I sell because of inflation?
With inflation wreaking havoc in the US and the world, it’s entirely justified to have some questions about what to do with your stock portfolio.
With this much uncertainty, it’s hard to feel confident about the smallest things, like whether to add to your portfolio or sell assets.
The answer regarding whether you should buy or sell stocks also depends on which stocks are under consideration.
It’s not shocking that people are thinking about selling stocks between justified fears of inflation contributing to a prolonged bear market and the economic pressure inflation inherently forces onto investors because of the rising prices.
Selling puts money into investors’ accounts and inoculates them against the anxiety caused by daily falling share prices. But it’s usually not a good idea as timing the market is a fool’s errand that doesn’t typically end well.
Selling right now may not be the best of ideas as, chances are, the ability to compete in a given company has not changed as much over the last few months.
Warren Buffett’s timeless advice to “be fearful when others are greedy and to be greedy only when others are fearful” is as relevant as ever.
The fear surrounding inflation in the market is driving stocks down. In many cases, the movement is not prompted by a reduction in this company’s abilities to grow or compete.
So, if you have your eye on a stock and your investing thesis for it isn’t negatively impacted by ongoing economic events, it’s probably as good a time as ever to buy it.