Why There's No Reason to Sell Stocks: The Real Fear of Investors

Fearing a recession, the consequences of war, inflation, etc., more and more investors want to hit the sell button. But maybe these are all just excuses? Was there ever really a reason to sell?

While more and more institutional investors and private customers are throwing their shares onto the market, one has to ask oneself: Have these investors learned nothing? In fact, panic situations usually led to short-term sales, but in the long term these were just statistical noise.

It's all just excuses: There's no reason to sell stocks

For example, the following graphic from the S&P500 shows that despite war, recession, inflation, etc., the stock markets have continued to rise in the long term:

Accordingly, there are few logical reasons to sell stocks, especially because most investors are then unable to get in at the low point and take advantage of the favorable prices.

In fact, many of the performances of funds and robo-advisors in the Corona crisis show a frightening picture: the experts sold at the low point when volatility was high and only then got back in at the high point, which resulted in massive losses for investors.

That's why investors shouldn't sell now

Selling shares, as long as you don't depend on the money, is a purely emotionally driven act, as many investors experience a kind of fear of the future. But no matter how bad it may seem, Sir John Templeton once said: “The four most dangerous words in the stock market are: This time it’s different.”

Basically, as long as people strive for prosperity, the economy will grow, which will also drive up stock market prices in the long term. Of course, one or two companies that you have in your portfolio as individual shares may not survive, but if you invest long-term and widely, you should have few problems with it.

So if you are still interested in building long-term wealth, there is no reason to sell during this crisis.

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