I was discussing a tactic to use in situations like this. Keep a good chunk of money available, and during situations like this, you can use them as buying opportunities. Once you make back your loss, sell off the additional stocks to make a profit and come out on top. I know people like to set certain percentages in doing this. For instance, some will go with 10% loss, then buy the fallen stock at the 10% lowered price, then sit on it until it bounces back. This will actually get you further ahead in the long run than investing 100% of your money and just sitting on it without being proactive. Let's say you have $10,000 invested in a stock. Stock drops 10%. You now have $9,000. You invest $1,000 back in to the stock to get it back up to $10,000. Once the stock reaches it's original buying price again, sell off the extras, making your money back. This will put you up to $11,000. If you don't do this method, the stock has to recover by 120% in order to make up for the loss, where as, this way, you take advantage of the drop. This isn't 100% every time, but it comes out on top of doing nothing in the long run. In fact, I asked my broker if they use something like this, and he said "Only if the client asks about it or I know they can stomach it, then we put them in to another program that uses that strategy." It's all about taking advantage of a bad situation. It doesn't always have to mean the sky is falling every time the market corrects.
I sure hope things correct themselves soon, this is scary. I took a look at my portfolio and moved a few things around in an effort to get a few new stocks that may eventually yield me more money. Will see how it goes.
I think that many investors who have IRA's are putting some of their money in gold. This makes them feel a bit better than investing in stocks or paper currency. Of course you need to invest with someone who understands the legalities of doing this. There are specific types of gold that need to be used, not just any old thing. Gold can be part of a diversified portfolio anyway.
You should not worry but take heart. Everything shall level out with time. This is the nature of the stock market where high risks are coupled with high returns. The best thing to do is to balance the risk with binary stocks so that you greatly reduce the element of risk. The stock market is volatile and you should monitor your stocks to offload strategically when prices improve.
