Stevenson: It Never Pays to Panic

I thought Tom Stevenson had given up writing columns for the Daily Telegraph some time back to devote his energies to his day job. Perhaps he's come back -- he's written several pieces recently -- due to the market turmoils.

And good thing he has. He talks sense. Wish we had more like him on this side of the pond.

Stevenson's latest is on the money:

From the point of view of survival, fear is a good thing. Hesitation, even for a split second, can be the difference between life and death. Fight or flight is hard-wired into our brains.

If the threat to our well-being is financial, exactly the same reactions are triggered. When it comes to preserving our capital rather than our life, however, fear is not always desirable. Very occasionally, panic can turn out to be precisely the right response for an investor. In most cases, though, the person who gains most is our broker.

And he ends with this:

Value and the unmistakeable whiff of fear. Historically, that's been a happy combination. But don't expect anyone to listen – they're too busy watching the end of the world.

Here's hoping Stevenson's column keep appearing in the Telegraph. Even when the markets recover.