ASX, Wall Street Evergrande fears: Buy, sell or hold?

On Sep 22, 2021

Investors alarmed by the significant drop in the share market on Monday have been cautioned by experts against tampering with their portfolios, and to view the volatility as an opportunity to snap up certain stocks for bargain prices.

Global share markets around the world have been a sea of red over the past few days as the Evergrande’s near-collapse sparked speculation that it might be the next Lehman Brothers.

But AMP Capital chief economist Shane Oliver said the ‘contagion’ fears were actually part of a “long worry list” of reasons contributing to what he described as share “wobbles”, which investors should simply take in their stride.

“While they all have different triggers and unfold differently, periodic corrections in share markets of the order of 5 per cent, 15 per cent and even 20 per cent are healthy and normal,” Oliver wrote in a note seen by Yahoo Finance.

In fact, we were due for a correction anyway, according to BetaShares chief economist David Bassanese.

“After strong gains in recent months, markets globally were due for a pullback and uncertainty with regard to US interest rates, COVID and Chinese real estate have provided handy catalysts,” he told Yahoo Finance.

But investment jitters – while understandable – shouldn’t necessarily be acted upon. Here’s what the experts say you should do.

Buy, sell or hold? It depends who you are

First things first; punters should know that stock market dips are part and parcel of the nature of investing. “Market volatility is the price of admission when investing in the equity market,” Bassanese said.

So what should you do with your money? That will depend on what your goals are as an investor.

“Short-term traders or investors will be inclined to sell some or all of their holdings if they have not already,” Wealth Within chief analyst Dale Gillham said.

But if you’re in it for the long haul, there’s no need to react. “Those with a long-term view will just treat the current move down as part of the ride and hold.”

It’s also an approach that Motley Fool chief investment officer Scott Phillips is taking to his very own investments.

“My portfolio got nailed today. So you know what I’ve decided to do about it? Nothing,” Phillips tweeted. “Business as usual. These things come and go. Keep your eyes on the (long term) prize!”

Meanwhile, if you haven’t dipped your toe in the investment market yet but you were thinking about it, now might be the time.

“They would be wise to sit back and wait for the low and then buy into the market as many great opportunities are setting up,” Gillham said.

WATCH BELOW: Evergrande potential default weighs on stock market – here’s why

An Evergrande opportunity

Rather than being spooked, investors should actually be looking for ‘bargain’ buys created amid the stock market rout.

“The S&P 500 sell-off is an opportunity to buy stocks on the ‘dip’ as the economic recovery is poised to pick up…