You don't get rich selling at the lows

BLAME America, blame Greece or blame Italy, it doesn’t really matter. The billions in value lost on the stock market in recent days has caused much panic.

What most share investors want to know is when their portfolios will stop dropping and what they should do about it.

Alto Capital investment manager Peter Hayes said the best thing to do was take a deep breath and turn the bourse’s bloodbath into a positive.

Hayes said plummeting share prices meant bargains could be snapped up, “particularly when everyone is calling the end of the world”.

“Historically these are the times not to panic,” Hayes said.

“Nobody ever got rich by selling at the lows.”

When the downturn will swing upwards is anyone’s guess.

“But we are closer to the bottom than further away,” he said.

“I believe we are closer to the next currency print run than farther away.

“The US Federal Reserve will have to provide liquidity as will the Europeans. Liquidity is the lifeblood of markets and the regulators need an efficient market above all else.”

The key thing to remember is that commodity demand from China and India hasn’t been impacted by the West’s debt woes.

“My belief is the large resource companies listed in Australia are best placed to ride out the economic malaise we are in,” Hayes said.

“BHP Billiton, Rio Tinto and Fortescue Metals Group would be my stock picks on any downturn in the market and I would buy them with a trading mentality.

“Use the volatility to your advantage; holding for the long-term is yesterday’s mantra.”