RE:Add me
goldclrglasses wrote: To the list of those that are now out. I'm sorry, but even with gold up moderately today, we're still down over 3%? I think that those with patience are going to have to wait a long time as clearly nothing other than the hand of god is going to move this companies share price up considerably
It is important to understand that during tax loss selling season good stocks will get sold if there are capital losses to be had. Where better right now than in the precious metal or energy sector. As such, normal fundamentals like the rising price of gold will not impact the stock in a normal way as there are more sellers than buyers (supply and demand). I for one think this is a great time to pickup some bargain prices on sound companies and am not selling any of my precious metal stocks.
We saw the same thing last year at this time and then saw significant gains in precious metal stock prices in the 1st quarter of 2014.
Two basic rules of investing that should be kept in mind at this time of year courtesy of the Financial Post. Examples are given in the energy sector but the same principles can be applied to the gold sector:
Don’t sell because it is down
Many investors have recently thrown in the towel on the energy sector, just like they did on the gold sector earlier this year. Selling because you are losing money is the wrong reason to sell.
Sure, getting rid of your losing investments is often the right thing to do because of weakening company fundamentals, but not because of a weak share price.
Case in point, Glentel Inc. Many investors gave up on the company because its shares had not done too much, and they were bored. Glentel’s last quarter showed some improvement, though, and BCE Inc. considered it good enough to take over, at more than a 100% premium.
We imagine there will be plenty of takeovers in the oil sector next year, because investors are too indiscriminately selling.
The rule for 2015: Sell for fundamental reasons, not because of share prices.
Stay calm
This tip might seem obvious, but in the volatility of September and October and more recently in the energy sector, investors went into fullon panic mode.
A company’s fortunes do not change overnight and a 25% drop in a company’s shares does not mean its earnings will drop 25%.
In pipelines, for example, shares of companies such as Pembina Pipelines Corp. have dropped 30% or more in 60 days or so. Has the pipeline business changed that much? Are dividends that less secure? Probably not.