Ask Doc Monday was a day of bloodshed in markets around the world...
Japan's Nikkei 225 Index had its worst day in decades after falling 12.4% and officially entering a bear market. European markets fell 2%. And here in the U.S., the Dow, the Nasdaq, and the S&P 500 indexes all saw losses near 3% or more.
Several brokerages, including Fidelity Investments and Charles Schwab, went down as traders rushed to log in to their accounts.
During the chaos, my team asked what I made of it all. There are two things I often tell folks to do when fear like this grips the market...
First, shut down your computer and go for a walk. Then, get ready to put your money to work in the markets as good deals on stocks pop up as panicked investors sell.
If you've followed our advice over the years – like using proper position sizing and diversification – you don't need to worry about corrections like we saw on Monday.
But I understand that advice isn't always simple to follow. It's easy to get scared when everyone else seems to be panicking.
And serious long-term challenges are facing investors. But my team and I are here each week, to help you navigate these challenges.
One of the topics we discussed is the No. 1 thing we recommend you do immediately to prepare yourself for what could be a very long and volatile period in the markets.
The entire special broadcast is going live next Tuesday at 9 a.m. Eastern time. Click here to make sure you don't miss it.
Now, let's dig into the Q&A... As always, keep sending your comments, questions, and topic suggestions to [email protected]. My team and I really do read every e-mail.
Q: What exactly do you mean when you say to never enter your stops with a broker? How would I know when to sell otherwise? – E.M.
A: Most brokers give you the option to enter your stops "into the market" – in other words, telling your broker to sell automatically if your stock falls to a certain price (a hard stop) or a certain percentage from its highs (a trailing stop).
But you should never reveal your stop loss to your broker or anyone else. Entering your stop price into the market is tempting for its convenience, but it leaves you vulnerable.
If they know you'll sell automatically at a certain price, investors or brokers who see your stop can temporarily manipulate a stock's share price to push you out of the position. So never enter your stops into your brokerage account as part of your order.
To be clear, we are not advising against stop losses... quite the opposite.
Just track them on your own (in a notebook or Excel spreadsheet, for example) or through a service like our corporate affiliate TradeStops.
Using strict stop-loss rules to avoid capital losses removes emotion from the trade. When you're wrong, admit it and take your lumps. It's one of the most important rules to successful investing.
Remember, before you invest, know exactly why you're buying the stock and what would make you sell it.
Set yourself up to succeed by knowing ahead of time what your exit strategy is. Stop losses are a great asset for any investor, so start using them to monitor your portfolio today. Just don't let your broker sell your stocks automatically for the wrong reason.
Q: In your piece on ticks, you failed to mention what to do if someone finds a tick. Advice? – H.R.
A: If you've discovered a tick on your body, there are a few steps you should take...
Remove the tick without delay. If you find a tick on yourself that hasn't attached, you're in the clear. The trouble starts when an infected tick bites you. And the sooner you remove the bug, the better your chances of avoiding infection.
Lyme disease's transmission times depend on the tick and can range from four hours to 96 hours of attachment time. But some diseases infect you faster – for instance, a tick can transmit Rocky Mountain spotted fever after a six-hour blood meal and the (fortunately rare) Powassan virus after just 15 minutes.
Removing an embedded tick can be tricky, though. Many ticks sport fishhook-shaped barbs to get a good grip on your flesh... And they top it all off by secreting a gluey "cement" that forms a tight seal between their mouths and your skin in as little as five minutes after biting you.
Lots of folks claim they have "secrets" to removing ticks... rubbing alcohol, a lighter or a lit match, petroleum jelly, or nail-polish remover. These methods don't work. You really need a pair of pointed tweezers, a slow and steady hand, and – as I'll discuss – a bit of caution...
Don't just yank it off. With the tweezers, grab the tick as close to the skin's surface as possible. Pull upward in a steady, continuous motion – don't twist or wiggle the tick. That way, you'll remove the whole critter.
Make sure to save the tick, too. If parts of the tick remain in the skin, leave the area alone and let the skin heal... Your body will expel the parts over time. Finally, clean the area with rubbing alcohol or soap and water.
Don't flush it down the toilet. If the tick was carrying an illness, it might take several weeks or even years for symptoms to appear. Knowing the kind of tick that bit you can go a long way to determine what made you sick. And you can also have that particular tick tested for pathogens if you start to show symptoms.
A company called TickCheck will run a basic diagnostic panel for $50 (you can spend up to $200 for more details). Results take just a couple of days to come in. Plus, you can even send up to five ticks to be batch tested for no extra cost (as long as they're all removed from the same person).
If you're not up for dropping $50 each time you get a tick bite, put the tick in a baggie and stick it in your freezer for a few weeks. You can pull it out for testing if you show suspicious symptoms. Diagnosis and treatment are much quicker and easier if doctors know what illness, if anything, this suspicious tick was carrying.
What We're Reading...
- Did you miss it? Behind the "shocking" sell-off in tech.
- Something different: The healthiest communities in America.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
August 9, 2024