Tips for stock exchange investors

The important drops registered in the international markets have caused panic reactions among investors, which has lead to excessive sales. Harald Egger, Chief Investment Officer Equities, Erste-Sparinvest estimates a difficult situation for the stock exchanges in the forthcoming weeks and offers a few suggestions on the prudent measures that investors should take over this period.

"As a result of the panic reactions, all the markets have registered sales in excess, which foresees a new movement in the opposite direction. However, estimates are that the situation in the stock markets will be very difficult in the next weeks. Significant fluctuations, both negative and positive, will be at the order of the day", Egger believes.

The ascending trend that prefigures is more and more evident. The Erste specialist believes this may last a few months, and the investors must take measures of precaution during this period, not sell guided by panic, and also take into account the issuers' fundamental data.

"If you really must sell, wait for counter-movements, which occur during each contracting period and may be very solid. Choose a longer investment horizon. Buy only your investment horizon is for at least two years. If you need money in the next 6-12 months, do not invest in stock. Similarly, be very careful with the fundamental data. When we slip down into recession, profits may suddenly drop for certain companies, and what seemed to be a very cheap stake risks to rapidly become very expensive. Investors must remain focused on companies with a stable, non-cyclic profit development.

A last suggestion would be to buy small stakes. Do not spend your money all at once, profit from temporary price drops", he also explained.

Curierul National