Dear Sir,
I am a long term investor in stock market with time horizon of 3 to 5 years.My question is that should I exit totally from my holding of stocks if panic selling comes in market or remain invested for long term? Please explain in detail.

If you are a long term investor, then you should be using panics to buy and not sell.

You may want to churn your portfolio in this fall.

Prices have fallen sharply in this week.

Some of your stocks may have fallen because they were over-valued. Get out of those and try to find other reasonably valued stocks in the markets.

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Alchemist, please comment on the following article:
http://biz.yahoo.com/investopedia/080801/3419.html

Stocks can beat most investments in the long-term.

Just keep in mind:

1. Don't invest in a shrinking economy. If an economy isn't going to grow, it is unlikely that stocks as an investment-class will give any significant returns.

If someone would ask me about investing in the US stocks, I would advise him not to.

A growing economy like India will see a new bull market sooner or later.

2. Be careful with "hot markets", "hot sectors" and "hot stocks".

The euphoria created by the Reliance Power IPO was a warning sign that the market was overheated, but at that time nobody cared...

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