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Advice on bad market day

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Init

Joined
8 May 2017
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I am relatively new to investing and have only started to buy shares in the last few months (all ASX) after a lot of reading. After today everything is in the red including my portfolio which is understandable given the massive drop seen across the board today.

Given that my share prices have dropped, I would usually sift through the ones not doing well and reevaluate my position on those shares, however given that everything tanked at once is it even the fault of any company I have invested in? That is to say, on days like this is it worth analysing any single company to reevaluate your opinion on their viability or do you simply put it down to the market as a whole and keep your position?

I know some people have risk rules such as "if company XYZ goes red by 10% then I sell". Do you still apply these rules when the market drops like today?
 
Depends what kind of time frame you intended to hold the stocks for in the first place.
Short term traders need stops so they can buy something else that they hope is going to go up or down faster. Longer term not so much unless they see a fundamental change in the business.
 
In a self organised critical system such as the stock market, there will be days when it goes up, and days when it goes down. If this was not the case, then it would signal that something was wrong with the system, and I'd be getting scared.

Has anything fundamental changed at the companies that you have invested in to justify you changing your opinion of that company? Is CBA losing customers today in a way that it wasn't 3 days ago? Is BHP producing less copper or stated that it will miss any production hurdles?

If your investment logic was sound 3 days ago, it's still sound today. If you only sell shares when they drop 10% but are happy to buy when they go up a similar amount for fear of missing out, then you are guaranteed to blow through your cash in a hurry.

If you can pinpoint that the global rout is due to one specific factor that may disproportionately affect one of your portfolio holdings more than another, by all means re-evaluate, but absent that, just hold on for the ride. bulls are notorious for bucking...
 
Thanks for the replies.

I thought as much. If I valued the company well before and fundamentals haven't changed, I should still value them the same today. Just hurts to see so much red.
 
Unless of course the fundamentals in causing the “ correction “
Affect the companies your investing in!
 
How can you tell its a correction due to the company or just the market as a whole?

is there such thing as a company price going down through no fault of their own?
 
Yes of course.

It’s happening right now.
If it’s a company issue or one where the market action effects the company
Over the longer term then it won’t bounce back.
When the market does it won’t.
200 pt falls herald volatility.
The further it falls ( the ASX) the more volatility and the bigger the opportunities with
Great stocks.

Great stocks bounce back hard and quickly.
 
Init said:
is there such thing as a company price going down through no fault of their own?
Click to expand...

Yes, of course. For the last 9 years the accepted wisdom was that the developed world was low growth and interest rates would stay rock bottom, and the biggest concern was deflation. That has changed. Everything is being repriced based on the belief that deflation is not a risk anymore. I'd much rather this than 2011 or 2008 when the sell offs were because the world was crashing down.

After this initial selloff, I expect to see it start to become a bit more picky in what continues to fall. **** don't float.
 
If shares in xyz are a good buy at $2 then they’re an even better buy at $1 assuming the reason for wanting to own the stock has not changed due to the overall market.

Two things there - is the reason for the correction something that’s also bad news for a specific company whose shares you own?

And does a stock market drop or other financial market issues itself have an impact on the company’s business either direct or indirect?
 
Thanks Init for posing the Q and to the informative responses. As a newbie I'm soaking this up like a cracked claypan.
 
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