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Here’s What Top Investors Are Saying About Today’s Market

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Top investors could tell you not to panic until they’re blue in the face, but my guess is if you’re visiting Motley Fool Canada today, there is at least a little bit of panic happening right about now.

Stock markets around the world are practically in freefall. The reaction has been severe, with COVID-19 running rampant and the Organization of the Petroleum Exporting Countries (OPEC) seeing Russia and Saudi Arabia continue to pump out oil and gas.

So what are top investors doing right now?

What goes up…

It’s true that what goes up must come down. That’s what the market does. But what you don’t hear as often is that what goes down also comes back up again. Top investors remind us the markets won’t stay down forever, and if you choose wisely, today could actually be an opportunity to buy up those stocks you’ve been eyeing for incredibly cheap.

For example, let’s look at Toronto-Dominion Bank (TSX:TD)(NYSE:TD). TD wasn’t immune to the financial crisis back in 2008, and was one of the banks to sink incredibly low during that time.

Between September 2008 and February 2009, TD fell from about $32 per share to about $18 per share, a plummet of 44%. By comparison, today TD has fallen about 32% since February as of writing. It could therefore still have a ways to go.

However, if you look back at the Great Recession, after February, things got back on track for TD. By August 2009, the stock had surpassed its September levels and kept up a steady increase until today’s market crash. So within the year, your stocks could be right back where they were before the crash.

Keep some cash

Of course top investors would not recommend putting everything you have into TD right now. The market is also still volatile, so while it would be wise to make some investments, you should also keep some cash on hand. There are a number of reasons to do this.

First of all, you should never tie up everything you have in the stock market, even if it’s with relatively safe stocks, especially if those stocks offer dividends, which means you’ll still be receiving cash even during this downturn!

Having cash on hand means if things go really south, you’ll still have money available to pay the bills, buy groceries, and all the other necessities of life.

As well, you’ll be able to make rational decisions rather than emotional ones. It can be one think to make investments while they’re down, it’s quite another to see all your stocks continually fall and be tempted to walk away.

That decision, however, would be an emotional one. As I said before, what goes down will come up again if you’ve chosen strong, stable stocks. So be patient and have some cash available to allow you to ignore your portfolio until the markets recover.

Stay the course

Finally, while there are a lot of opportunities to be had, it might be best for you to just sit back and, as I mentioned and as top investors like Warren Buffet advises, ignore your portfolio. Don’t go digging around for the next big thing, and don’t make a major selloff either.

Simply stay put with your investments and be patient. Eventually things will be righted back to normal, and you’ll be happy to see your stocks continue on where you left them a few months before.

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Fool contributor Amy Legate-Wolfe owns shares of TORONTO-DOMINION BANK.

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