Watching the share market plunge can be unnerving, to say the least.
At the time of writing, the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has declined a whopping 80 points, or 1.4%, to 5,676 points. Leading the market down are the QBE Insurance Group Ltd (ASX: QBE) share price, down 8.2%, and Computershare Limited (ASX: CPU), down 3.5%.
The banks and miners aren't helping, either. The National Australia Bank Ltd. (ASX: NAB) share price has fallen 2.1% while the BHP Billiton Limited (ASX: BHP) share price has been slammed 3.5%.
It seems as though the fall has been exacerbated by a steep decline in oil prices overnight, taking the resource to its lowest price in months, as well as some disappointing updates from a number of companies, including QBE.
Chances are, you're feeling a little unnerved by today's fall, and selling your shares may have even crossed your mind. I spoke with a Fellow Fool, Sean O'Neill, recently, and he summed it up nicely when he noted "we are in an uncertain business and activity is the enemy".
My take is that selling can be an appropriate course of action for an individual investment when you have lost confidence in that investment. For example, if you believe the investment thesis is broken, or that growth mightn't be as strong as what you initially expected.
But selling in bulk just because the market declines is rarely a good idea. In fact, it's a pretty good way to lose money.
With the market sitting deep in the red today, try to focus your attention on controlling your emotions, and perhaps taking advantage of discounted opportunities. For instance, if there's a company you've been wanting to buy shares of, and it's trading in the red today, it might be a reasonable opportunity to consider a purchase.
Whatever you do, don't panic.
