Buy, sell, or hold? What to do when stock markets tumble

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 9 February 2018

⏱️ 43 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Buy, sell, or hold? When stock markets take a tumble, it's decision time.

Investors got a shock this week, when the prolonged period without a stock market correction – dubbed the Big Calm – came to an abrupt end.

Many were not surprised by the fact that shares fell, after all warnings that a correction must arrive have not been in short supply. But what did catch them off guard was quite how hard they fell and that the only catalyst was the threat of slightly higher interest rates.

On Wall Street, the Dow Jones dived 4.6 per cent on Monday, and then after a brief bit of mid-week respite, it tumbled another 4.2 per cent on Thursday.

In the UK, shares also fell but not by as much, although some with more high-octane portfolios will be nursing bigger losses.

So, is this just a healthy correction, or is it the start of something bigger?

On this week’s podcast, Simon Lambert, Alex Sebastian and Georgie Frost look at why shares fell, what investors should do when markets correct, and whether there is any way to dodge a crash.

Tying into that stock market storm was the Bank of England’s indication that although it was holding rates this month, they would now rise faster and sooner than expected.

We look at when that next rate rise is likely, and why the Bank has changed its tune. There's also a warning on debt from former Bank boss Mervyn King.

Also on this week’s show, we discuss the young people falling victim to temptation to launder cash as money mules and the petrol delivery service that comes to you.

Listen to the show, tells us if you like it at [email protected] or with a comment and please subscribe and tell your friends.

Transcript

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0:00.0	Welcome to This Is Money podcast in partnership with NSNI, bringing you a weekly roundup of the top personal finance, consumer and business stories that editor Simon Lamb and his team have been covering on their award-winning website.
0:14.1	I'm your host, Georgie Frost, and joining Simon I today is news editor Alex Sebastian.
0:19.7	And this week, buy, sell or hold. Remember,
0:22.8	folks, stocks can go up as well as down, but we seem to have forgotten that last part of late.
0:28.2	Well, investors got a wake-up call this week as markets tumbled around the world off the back of some good economic news from the states.
0:34.9	So what's going on? What should investors be doing right now? Simon gives us tips on how not to panic.
0:40.3	Also closer to home, better news for savers, more headaches for borrowers, as the Bank of England
0:46.3	hints that interest rate rises could be bigger and faster than previously suggested.
0:52.3	So is this finally the end of ultra-low rates and cheap money?
0:56.0	And with rates rising, how worried should we be by the amount of debt we're all in, governments, companies and individuals?
1:04.0	Well, very, says a former governor of the Bank of England, who had a ringside seat to the financial crisis.
1:10.0	Also today the team's been investigating the worrying cases of student money mules
1:14.7	and asks if fuel on demand is the future.
1:18.7	All that and plenty more coming up and don't forget you stay up to date with all the latest breaking money news.
1:23.3	Just go to this ismoney.co.uk or download the app.
1:27.0	This is Money, brought to you in partnership with NS and I.
1:31.6	Enjoy peace of mind with our new guaranteed income bonds and guaranteed growth bonds.
1:37.0	First, they take our jobs.
1:39.1	Now they're being blamed for this week's stock market turmoil.
1:42.2	The latest declines, interestingly off the back of some good economic news from the States,
1:46.4	show the Dow and S&P 500 dropping more than 10% from record highs set in January.
1:52.3	That makes it a technical correction, and while the falls in Europe haven't been as steep,
	...

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