Yesterday the media picked up on a Royal Bank of Scotland (RBS) report that said “Sell everything”.
Apart from the fact that the actual quote in Australia’s media was, I believe, misleading (the document said “Sell everything except high quality bonds” – still a big call, but is actually quite different to the headline – click bait anyone?), I just think the concept of it is ridiculous.
I’d also love to know if the author of the report at RBS has actually sold everything he/she owns, and for that matter whether all RBS analysts and advisers who are sending this report out have done the same – I’d guess not.
Does that mean that I think the everything will be roses, and shares can’t fall – No, I’m not saying that!
Do good quality stocks continue to pay you a solid dividend yield in times of uncertainty – They certainly do (granted some may reduce their dividends if times get tough, but generally they try their hardest to keep their dividends going)
Is it possible for some shares to go up when the market goes down – Absolutely!
If the share market does go down further, does that mean that all shares are duds – No!
And the last point there I think is the absolute key. Investing (as opposed to trading or gambling) is about taking a part ownership in companies that you believe have a good future. All companies will have good and bad periods, but what you need to look for is a business that you believe is in a good market, has good prospects and is run by good management – and for that reason you SHOULD NOT sell everything (unless the shares in your portfolio are in bad markets, with bad prospects and run by bad management – in which case you should have got out of it a long time before now!).