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Letting Terror Affect Your Investment Strategy

This article was written by in Investing. 1 comment.

When terror strikes, it’s easy to think about September 11 and the poor performance of the stock market following the event. It may be better to wait this one out before running for the hills and cashing out.

It’s better not to make hasty decisions based on world events. CNN Money offers that same advice. According to CNBC, European markets reacted worse to the events with major selling.

This sounds like it could be a good opportunity. If the dips aren’t permanent, it may be the right time to buy in. However, it still isn’t wise to make financial decisions rashly, whether buying or selling.

Tomorrow is pay day, which means my automatic investment in my 401(k) will take place. The investment will be about $160 including the company match. Perhaps the prices will stay low and I’ll get more for my money.

I don’t have spare money to play with and invest, otherwise I’d probably buy into the market in times of uncertainty and hold long enough that the gains should make it worthwhile.

This might not be the right time. Helene Meisler from RealMoney says this isn’t a buying opportunity and presents a thorough technical analysis of the charts.

Here’s another similar viewpoint from CNN Money. The markets are suffering “whiplash” but traders have concluded that there will be little economcal impact to this morning’s events. Oil, which dropped from $62 to $54 has already rebounded to $60. Move along folks, nothing to see here.

End of the day update: The stock market closed higher than it opened today. So much for uncertainty in the face of terror.

And finally, Amey Stone from Business Week’s Well Spent blog spoke to an investment strategist who explained why the upward turn in the market is a normal post-incident occurance.

Updated July 16, 2010 and originally published July 7, 2005.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

avatar 1 Anonymous

Unfortunately I do not have too much cash to invest today.
Otherwise it would have been a good idea.

I think the world will soon get used to the idea that terrorists will atack from time to time.

The show must go on, and the economy will have to keep moving.

Keep investing.

— jose