Crisis in Europe is no reason to sell—Pat McKeough on YouTube

This is the latest in a series of video interviews in which Pat McKeough will give his investment advice on a variety of topics. Some will deal with his overall investment philosophy, others on specific investment strategies and still others will be comments on events that are affecting the markets and the economy. This week, the topic is the ongoing crisis in Europe, and the apparently unsolvable problems of Greece. Is it time to take some money out of the market? On the contrary, says Pat, investors who remain calm are looking at modest risk and a lot of upward potential.
Q: Pat, a socialist president was elected in France and Greece took another turn for the worse. Is it time to be taking some money out of the stock market? Pat McKeough: I don’t think so. I think that short-term approach in reacting to really random sort of events is apt to cost you money in the long run. Especially now—the stock market has been basically depressed for 13 years. It hasn’t really done much for 13 years. The last time it did anything like that was in the mid-60s through the early 80s and when it finally got going it really took off. I think we’ll see something like that sometime, maybe next year, maybe five years from now. I don’t know, but I think now that we’re looking at relatively modest risk and a lot of upward potential. The thing is we don’t know when things are going to change, because there’s that random element in the stock market. But to get back to your question: we’ve been living with these fears since last year and beyond, and people are waiting for the other shoe to drop. And that’s not the same as being surprised by a development, like the fall of Lehman Brothers, for example. So just to answer your question then, long-time investors should hang on to a portfolio of well-established stocks that work for them with the right degree of risk for their temperament and their objectives. [ofie_ad] COMMENTS PLEASE Do you get an urge to sell when the stock market falls sharply for days at a time? Did you ever get the urge to sell just before the market was set to turn around and rise? If you have sold in response to scary headlines, how long did you wait before you went back in the market? Did you buy back in at a lower or higher price? Let us know what you think in the comments section below. Click here.