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Originally published Saturday, February 22, 2014 at 8:14 PM

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The Motley Fool: Every Sunday, useful tips on investing


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Q: Is it too late for me to refinance my mortgage?

A: Rates have been inching up over the past year, but they’re still very low.

Depending on your current mortgage’s interest rate and some other factors, refinancing may still be a profitable idea.

Learn more at Bankrate.com.

The Dow Jones industrial average (“the Dow”) fell by 878 points in January, losing 5.3 percent of its value. (The S&P 500 sank 3.6 percent.)

If your portfolio receives a 5 percent haircut in a single month, you might hyperventilate.

Don’t. Here’s what to do instead:

Take a deep breath, and remember that the stock market never goes up in a straight line, and that over the long run, it has always gone up.

Successful investors need patience and perspective.

Separate what you can control from what you can’t. If the market plunges or a company you own cuts its dividend, you have no control over that.

All you can do is reassess the long-term health of your portfolio or the prospects of that particular company, and decide whether you want to make any adjustments.

Don’t track your portfolio on a minute-to-minute basis and watch less financial news.

Remember that Warren Buffett has said he wouldn’t mind a stock market that opened only once a year.

Whenever the market dips or dives, remember to stay calm and focused, and you’ll make better decisions.

Consider looking for new bargains, too.

Dear Fool: As a total newbie, I invested in a stock based on news announcements, which more careful reading would have shown me came from the company itself.

It bragged about a new tablet, and then announced a 3-D printing acquisition and a new CEO with experience in 3-D development.

I finally sold the shares for around $0.04 each. The company isn’t even on the main stock exchange. So, live and learn. It was a cheap lesson. (Thank heavens that my brokerage charges only $7 per trade.)

— D.W.R., Bellevue, Wash.

The Fool responds: Ouch. That stock has fallen to $0.03 per share now. Stocks trading for less than about $5 per share are penny stocks — notoriously volatile and risky.

It’s fine to read information supplied by a company, but collecting outside opinions is valuable, too, as is studying its financial statements, looking for actual profits and growth. Using inexpensive brokerages is smart, as there are many good ones.

Some find Amazon.com’s (Nasdaq: AMZN) stock too expensive now, but plenty believe it still has lots of room to grow. Remember, too, that the stock has long been called overvalued, while it has averaged double-digit gains for many years.

So what will fuel the company’s growth in coming years? Seattle-based Amazon keeps entering new markets and building on existing ones, such as with its Pantry packaged goods business, set to launch this year.

The company generates about 40 percent of its revenue internationally, and its operations in emerging markets such as China and India offer great potential.

Amazon continues to gain market share in its relatively high-margin third-party business, signing up more merchants and reducing shipping times by placing more fulfillment centers near major U.S. cities.

It’s a significant player in cloud computing, too, and its Kindle business has been quite successful. Amazon’s “Prime” service, with more than 20 million members, includes video streaming and is a threat to Netflix.

There’s even speculation that Amazon.com could become a major smartphone seller.

As more consumers across the globe do more of their shopping online, Amazon and its shareholders are positioned to benefit.



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