BUZ LIVINGSTON: What to do when the market slides: Don’t panic!

Published: Thursday, June 27, 2013 at 05:12 PM.

After a particularly stinging loss to Georgia Tech on the heels of successive Auburn and Florida defeats, the late, great Lewis Grizzard wrote … nothing. Actually he scripted one sentence but only one and in a feat never seen before or since went to press with a blank column.  Blank newsprint is, and always will be, an anathema, but Grizzard’s journalistic moxie could not be denied.

The day after the market shed 350 points, a handful of fisherman had a similar idea taking advantage of a glorious South Walton morning by doing nothing, at least with their portfolio.  While I don’t fish, I do monkey-boat and it was a moment the TDC wishes it could bottle.

A line of showers came through late the day before. Instead of typical muggy summer weather following a shower, early morning risers enjoyed low humidity and pleasant temperatures. I needed to scoop up my legally stored (yes Turtle Watchers) kayak from the beach but couldn’t keep it out of the water. Watching the fishermen planted the seed for this column.

This is not a buy, hold and forget column, but rather a don’t panic sell column. Should you buy, sell or hold depends on your goals, time horizon and risk tolerance.  A few weeks ago a relative of mine flagged me down electronically and badgered me about the market, “Why did you let it go down? I got out back in 2009 then got back in last year.” Deep sigh, just because you can go online and make the trades yourself doesn’t mean it’s a good idea. 

Washington Irving, America’s first great writer, penned a tale featuring a slothful character named Rip Van Winkle. To avoid work and to escape his ever-nagging wife, Rip takes to the hills and stumbles on a gregarious group in the middle of a big party. After several games of nine-pens, multiple rounds of spirituous drink and much conviviality, Rip lays down for what turns out to be a multi-year snooze.  

Pretend you are Rip — for me a bit of a reach since my wife never nags — and you take a nap on Dec. 31, 2007, waking up early Friday, June 21, 2013. Trying to catch up on the news you hear all the gloom and doom regarding the market decline. 

When our 21st century Rip clicks on his accounts he likely is befuddled since the Dow Jones Industrial Average grew more than 11 percent during his nap coupled with 2-3 percent annual dividend income.  When Irving’s Rip woke up, he declared his allegiance to King George III sleeping through the American Revolution while our modern day Rip would have been just as confused with the market decline chatter.

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