Ouch!

Ooof that was nasty. Thankfully you don't get many days on the stockmarket like Tuesday the 27th February 2007. My growth portfolio was down almost 4% and every stock in my portfolios and wish lists was down. The normally solid FTSE 100 was down over 2% and the S&P500 was down an incredible 3.5%!

On a day like yesterday being diversified didn't help as everything was down. Of course those with a significant proportion of their portfolios in cash were smiling sagely.

It is frustrating to see gains earned over weeks and months wiped out in a day but the stockmarket is a fickle beast. Yesterday's correction was not the worst drop in recent history and certainly will not be the last. I guess the lesson is not to have any money you are going to need in the next few years in the stockmarket. The other lesson is that the market is stronger that individual growth stories. What I mean that is that nice stocks like eBay and Gilead Sciences were hit as much as anything else. The market is like an incoming tide knocking over any sandcastles on the beach.

The final lesson is that it is nice to have some cash sometimes. After selling Tesco I felt that there were some optimistic valuations around and didn't rush to reinvest the proceeds. How being 15% in cash helped yesterday! Now when I do invest it in a few weeks (probably in British Land) I will get a much nicer price. Short term weaknesses are the friends of the patient investor.