the richest man in atherstone

Since buying my stock in Plusnet last Friday, the stock market has taken a turn for the worst. Not just the AIM index but the FTSE and Dow Jones too, as well as whatever its called in Japan. Everything seems to have gone down in value!

The shares I bought at £2.62 each are now worth around £2.30. Earlier today I realised that I had to make a decision. Should I:

1. Sell the stock and cut my losses
2. Keep the stock
3. Buy more stock at the lower price

I looked at all the news stories I could find and market analysts could basically be lumped into two groups; those that thought this was the beginning of a market crash and those that thought it was just a blip and would recover.

I decided to buy some more stock. Although I'm no expert, I figured that this was most probably a correction to the market. Its been rising steadily for a while now and is due a small (I hope!) fall. Hopefully it should continue to increase over the long term. Also, it looks as though investors have panicked a bit as the volume of shares sold have increased over the last few days. Unfortunately, this has increased the downward spiral. I believe it was Sir Isaac Newton who said after losing a fortune:

"I can calculate the movement of the stars, but NOT the madness of men."

Personally, the most important thing for me to do was to continue my adventure as a shareholder. I knew that if I sold up now, I would never risk putting money on the stock market again and an important part of my 'Financial Education' would be finished before it had begun.

I bought another 100 shares in Plusnet, this time at £2.35 per share. I've now spent £499 in this stock and still feel confident it will grow in value. Not being one to change my mind quickly, I stick by my original forecast that over the course of the next 12 months or so, Plusnet will be bought by a bigger Telecoms company and I will be able to sell my shares at a profit (a minimum of £3.00 per share).

I feel over the last few days, by actually doing something instead of procrastinating, I've learnt a fair bit about the basics of investing, which was my original objective. If I lose my money now, I think it will be money well spent.