The Latest News From The Motley Fool: A lesson in real life

The Motley Fool started as an irreverent investment newsletter and has grown to become one of the most popular personal finance and investment websites. Anyone who follows its philosophy is called a "Foolish investor".

LAST WEEK was a roller-coaster ride for stock market investors. Yet it all started well for market watchers, as on Monday the FT-SE 100 closed up 95 points at another new high.

On that same Monday evening, Wall Street closed down just over 50 points. Nothing unusual in that, you may think, but earlier in the day the Dow Jones was up a staggering 270 points. A 330-point intra-day reversal had the market bears sharpening their claws.

On top of that, the technology-dominated US Nasdaq index plunged more than 5 per cent in just one day's trading. Given that a market correction is usually defined as a 10 per cent fall, the Nasdaq was half way there in just one session. Visions of October 1987?

Most Fools are aware of the exceptionally strong performance of internet shares in the past year. Companies such as AOL,, eBay and Yahoo! are quoted on the Nasdaq. These companies are seen by many to be the market leaders of the new world. Yet each took a hammering, as the US internet index sank almost 13 per cent. For those people who had been saying these shares were wildly overvalued - and they have been saying it for a long time, even though they have gained about 300 per cent - they finally felt some sense of justification and satisfaction.

Naturally, Tuesday saw the London stock market follow Wall Street's lead and by the end of the day, the FT-SE 100 had plunged almost 200 points. However, in the general context of the stock market, this fall was of little significance. The FT-SE 100 was still up more than 7 per cent since January 1999.

The market tends to rise relentlessly and occasionally falls quickly, yet the latter event is the only one that makes the headlines. Is it any wonder that most of the general public do not invest directly in the stock market?

Here in the UK, we have very few pure internet shares. Over time, that should change. Dixons, better known for its high street stores, owns Freeserve, the country's biggest internet service provider (ISP). On Tuesday, its shares short circuited for a 108p fall, or an 8 per cent drop.

The telecommunication companies, beneficiaries of the net boom, suffered too, with Energis similarly seeing 8 per cent chopped from its market value.

Despite Tuesday's carnage, the markets bounced back. At the moment, they are nothing if not resilient.

However, this will not always be the case, as the Asian crisis has shown. Although the stock market has managed to get through this week's volatility relatively unscathed, history says that this won't always be the case.

So should you be selling out now? That is something only you can decide for yourself. Markets will continue to swing wildly, and this is something investors will have to stomach. It goes with the territory. But, only those with the ability to stick out the bad times as well as enjoy the good - over the long term - will be the winners.

Motley Fool,

Start your day with The Independent, sign up for daily news emails
Life and Style
A monstrous idea? Body transplants might no longer be science fiction
Science An Italian neurosurgeon believes so - and it's not quite as implausible as it sounds, says Steve Connor
Demba Ba (right) celebrates after Besiktas win on penalties
footballThere was no happy return to the Ataturk Stadium, where the Reds famously won Champions League
Arts and Entertainment
Natural beauty: Aidan Turner stars in the new series of Poldark
arts + ents
Mia Freedman, editorial director of the Mamamia website, reads out a tweet she was sent.
arts + ents
Arts and Entertainment
The write stuff: masters of story-telling James Joyce, left, and Thomas Hardy
arts + ents...begging to differ, John Walsh can't even begin to number the ways
Jose Mourinho on Sky Sports
footballEXCLUSIVE COLUMN Paul Scholes: It was not a leg-breaking tackle, as the Chelsea manager had claimed
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Telesales / Marketing Executive - B2B - OTE £25,000

£17000 - £25000 per annum: Recruitment Genius: An opportunity to join this new...

SThree: Trainee Recruitment Consultant

£18000 - £21000 per annum + OTE £45,000: SThree: SThree Group have been well e...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Recruitment Genius: Business Control Manager

£36000 - £44000 per annum: Recruitment Genius: Encouraging more businesses to ...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower