This page is quite old hence its rather spartan appearance.
Why not check out our Latest Stories page for our newest articles or search our site for anything.
MARKET COMMENT
By
Carburton Street, London-- Suffering from yet more tech stock bloodshed? If so, you've got three options: * Get a tracker: The latest bout of stock market turmoil is all part and parcel of investing. If you can't stomach the volatility of your handpicked portfolio, then individual stock picking isn't for you. And there's no shame in thinking that this whole stock picking game can be more trouble than it's worth. Quite the opposite, in fact. It cannot be emphasised enough that the most Foolish investment decision in existence is the low cost Index Tracker. If we use history as our guide, then over the long term, an index tracker will outperform all other forms of investment, the majority of managed funds and (probably) most other private investors too. Best of all, the tracker requires no time, skill or ongoing maintenance. On an effort to reward basis, it outshines all other investment alternatives hands down. Visit the Motley Fool's ISA Centre to learn more. * Get a new strategy: Every investor tries a handful of stock picking strategies before settling down to one they feel inherently comfortable with. And sustaining big losses on tech stocks suggests you could be in need of a new investing philosophy. So, if you feel you can do better than a tracker, then why not read about alternative stock picking guidelines in this Introduction to the Motley Fool's Investing Strategies. In fact, how about going from one extreme to another and exploring value investing? Rather than focusing on a company's products and potential growth, it's the company's valuation that is key to this form of investing. During 2000, Stephen Bland (TMFPyad) highlighted 22 "value" shares, gaining an average of 24% last year. Visit the Value Investing archives to learn more. * Hunt for tech bargains: This is perhaps the best option. Remember the tech euphoria of a year ago? You should have sold out, shouldn't you? Easy to say now, but few did. So who's to say that the current tech stock bloodshed isn't the complete opposite? That is, who's to say that in a few years' time you won't look back and think that now was the time to buy? Long-term investors in shares should welcome market declines. The tech carnage won't go on forever. Of course, never buy anything willy-nilly just because everybody else is selling. But at some point, certain great growth companies could be marked down to irrationally low levels, driven by widespread fear and despondency. The task of the Foolish tech stock investor is two-fold. Firstly, identify the tech companies you understand, which produce market-leading products and have genuine prospects for substantially greater profits in the years to come. Secondly, and very importantly, use valuation as your guide to any purchase. Those battered tech shares that have a price to earnings (P/E) ratios under 25, a price to sales ratio of below 3, or even have the comfort of a reasonable dividend yield, are good starting points for further investigation.