If your portfolio has been hit hard in recent weeks, you're not alone.
Investors all around the world have watched their wealth decline before their very eyes after the World Bank slashed its forecasts for global growth as the commodities crisis shifted into a higher gear.
Over in the United States, the S&P 500 recorded its fifth consecutive day in the red overnight in what has been the worst start to the year since the Global Financial Crisis. The Dow Jones Industrial Average and NASDAQ indices are also on the nose with some of the world's biggest companies plunging in value.
Here in Australia, the news is much the same. While energy stocks are copping the worst of it – Senex Energy Ltd (ASX: SXY) and Woodside Petroleum Limited (ASX: WPL) down 11.3% and 7.9% in the last week alone – other sectors are also feeling the heat with the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) down 3.2% since the beginning of the week.
Indeed, every investor out there knows the pain of losing money. It's a helpless feeling, not knowing how far the stocks will fall or when there will be some element of relief. What makes it even worse is the temptation to press that "Sell" button to limit the losses and escape that agony.
In reality however, that's the worst thing you could do. By doing that, you'd be selling out at a discounted price (to some investor on the other side of the country who is more than happy to pick up your bargain) and destroying any chance of recovering those losses when the stocks eventually recover.
While it would seem unwise to try catching the falling knives in the mining sector, there are plenty of other compelling stocks which are definitely worth looking at right now. Instead of selling stocks, the smart investors are actively searching for bargains in stocks which may have otherwise been trading at unreasonable or more expensive prices.
Two which have really caught my attention recently are Infomedia Limited (ASX: IFM) and Nearmap Ltd (ASX: NEA). While Infomedia downgraded its profit guidance, resulting in a huge selloff of its shares, its huge long-term potential remains intact. Meanwhile, despite the absence of any bad news, Nearmap's shares have tumbled nearly 14% since the beginning of the year, giving long-term focused investors the perfect opportunity to stock up.
Another stock which has been sold off recently has just been named by our top analyst as his top stock pick for 2015.
