What should you do when oil is up to $140 a barrel? Should you sell your stock because the Dow is down 400 points? When I look back on my past investing, I realize that I usually buy when everyone panic or scare from what happening with the market. Do you think I am stupid when everyone is dumping financial stock but I am buying more of it?

The 1929 Depression
If I remember my history correctly, this is not the first time financial were in trouble. During 1929 depression home could be bought for a few thousands dollar compare to today. The banks were closing and not opening to consumers because they don’t have any money for them to redrew.

The deposits dry up because banks used those deposit to bet on the stock market. When President Roosevelt came into power and created the New Deal campaign; the economy got back on it feet.

The Past Cannot Be Used
The past cannot be uses to determine the future because the condition are not the same. What we can do is learn from it so that it does not repeat. Why do I say that? We can see a pattern on how the market behaves but we cannot be 100% sure. I don’t believe that in time things will sort itself. What must be done is to have a leader like Roosevelt that can solve problems. Nobody want a leader that think things will sort itself out while he is having a party at his Hampton home.

Final Thought
I think that panicking is the worst thing you can do when the house is on fire. What you must do is to be calm and try to find a way out. Panicking wouldn’t do you any good since you already lost money on your 401k or stocks. Should you sell out and take the lost or buy more? The question I should ask is can the company you owned weather the storm? If the company you owned cannot weather the storm like Country Wide then there is no reason to be dreaming and hoping.