Opinion
By Diane Hay Chief executive, ProShare

ProShare is an independent organisation in the UK that promotes wider share ownership and financial education. With the collapse of share prices worldwide over the past few weeks, many private investors may well feel like throwing in the towel, getting out of shares altogether and putting the cash under the bed.

ProShare's advice is 'Don't panic' - losses on paper don't become real until you decide to sell.

It is very likely that companies you have invested in are perfectly sound

Selling all your shares now may be one of the worst things you could do.

If you are investing in the stock market for the long term, take comfort in the fact that, historically, share prices do come back.

'Be patient'

The FTSE All-Share Index took two years to recover to the level it was trading at before the great crash of October 1987, but it then doubled over the next 10 years.

Remember that what we are seeing is a crisis of confidence in the whole market.

Not even the experts know when this market will start to pick up

It is very likely that companies you have invested in are perfectly sound and their shares now represent good value investments.

But perhaps you are thinking some of the companies whose shares you've bought are never going to make it to the recovery ward, let alone become star performers?

'Check your portfolio'

If the original reason why you bought that share has gone up in smoke, then maybe it's time to be thinking about calling your broker and cutting your losses.

Maybe you think it's actually a good time to be buying?

Not even the experts know when this market will start to pick up.

As City traders say, trying to guess when the market will turn round is like trying to catch a falling knife!

Although there are certainly bargains around, going into the market today is not for the faint-hearted.

If you are up for it, then you need to do some homework to find a good value company.

'Buy little and often?'

A good test is to ask yourself - particularly in the post-Enron world - do I really understand how this company makes its profits?

If you don't understand their business, you'll never be able to judge their potential.

More than ever the quality of management is critical.

Ask yourself what you know about the people running the company. Maybe now is not the time to try out your faith in that 25-year old entrepreneur with one great idea.

And remember that when the market is so volatile, buying little and often is a well-used technique to even out the cost.

So ProShare's advice is to think carefully before you buy or sell in today's market and use your common sense.

This is exactly the time to look before you leap.