The Ghana Stock Exchange (GSE) seems to headed to the third year of negative returns in the last 5 years, with the composite index down 7.32% year-to-date and the financial stocks index down 4.61%. In the meantime, fixed income seems to be thriving with treasuries returning 14-18% and bonds returning 17-20%.

If you have a significant allocation to stocks, especially through direct purchase rather than through a mutual fund, you may be tempted to dump your stocks and cut your losses. And you should if you had bought them for the purpose of making a quick buck, or you saw it as a way of saving up for something you plan to buy. However, if you had a really long-term focus, then you should hold on to your shares.

This is because any sale right now is going to happen at the lowest possible price. Liquidity seems to be a general challenge and the enthusiasm to purchase shares has been dented by the lackluster performance of MTN after listing. You could not pick a worse time to sell.

The majority of my allocation to stocks is through mutual funds and my pension contributions but I also hold a few stocks and I have not made any attempt to reduce my allocations. In fact, I still make monthly transfers to a fund with an equity bias. This is primarily because I have a fixed income allocation to reduce my risk but also because I know selling would be a disaster in these conditions.

If you are having trouble sleeping due to your stock portfolio, you could halt your purchase of equity and equity funds and start building a fixed income allocation until you are confident enough to go back to buying stocks. But selling at the poor prices you will get right now might not be the best move.