Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Investors Warning, Three Moves You Will Not Regret Taking Now

Stock-Markets / Stocks Bear Market Oct 19, 2009 - 10:52 AM GMT

By: Q1_Publishing

Stock-Markets

Best Financial Markets Analysis ArticleMost investors are still nervous.

The S&P 500 has reached its highest point since September 2008. After that time though, it went on to fall 26% in two months.
Earnings season is in full swing. And with each report we see top line revenues and bottom line earnings are not rebounding nearly as fast as stocks have.


The housing market is still proving troublesome for banks too. Aside from the shadow inventory, rising foreclosures, and the expiration of the $8,000 subsidy for home buyers, bank right-offs are still on the rise.
Then there’s unemployment, tax hikes, etc.

Basically, there’s not too much to be excited about from a fundamental perspective.

That’s why, as mentioned in our free e-letter the Prosperity Dispatch, I recommend making three moves now. And whether the market continues to go higher and gloss right over the real risk in this market, or we’re really at the euphoric top, you won’t regret taking the next few minutes to do these today.

The Real Risk in Today’s Market

As we mentioned above, there are a lot of economic roadblocks. Any one of them could easily trip up the recovery – or, more likely, the appearance of a recovery.

But as so many of us learned over the past few months, the stock market and the economy are two different things. The correlation between the two is abstract, not exact.

That’s where the real risk comes into play. If the markets were to take a turn for the worse, there aren’t too many catalysts to stop the overall market from falling.

And any downturn would just be exacerbated by what’s been fueling this last leg of the rally - emotional money.

You see, mutual funds, the favored vehicles of emotion-driven retail investors, have experienced 30 straight weeks of inflows. The Investment Company Institute has tracked a total inflow of $316 billion in the past eight months. The charge is on and any downturn could spark a quick flight from these funds.

You’ve seen what $300 billion of buying can do to push stocks up. There’s no reason to expect a similar sized drawdown to have the same effect, only in the inverse.

For now though, the trend is up, the herd continues to take money off the sidelines and throw it into markets, and the bulls have been able to stampede over any significant bad news. Still though, I recommend taking action of a different sort today.

Three Moves You Won’t Regret Taking Today

A downturn will come – eventually. And it’s never too late to get prepared. Make these three simple moves and you will be well prepared to navigate it all successfully whichever way the market goes.

Review Your Investment Plan

In our premium investment newsletters we NEVER enter an investment without a well-defined plan. The plan always includes how much we’re willing to risk, an expected timeline for results, a list of the potential catalysts (i.e. earnings, legislation, etc.) that would likely push shares higher, and an exit strategy.

Having a plan is essential to investing successfully. Now, with the markets reaching new highs and a few weeks of volatile earnings season left, it’s a better time than ever to review yours.

Prepare for How You Will Feel

What if the markets fell apart this week? What if the Dow fell 100 to 200 points a day with one of those 300 or 400 point down days thrown in there?

What are you going to do? Sell out and run to cash? Or are you going to buy on the dip?

If and when the markets do take a turn for the worse, you’re going to be faced with some tough decisions. And with your portfolio down 5%, 10%, or more, you will be at much greater risk of having emotions play a role in your decisions.

Emotions cloud judgment and, when it comes to the markets, lead to costly mistakes. There’s no way to avoid emotions when it comes to investing. There are, however, ways to mitigate the impact of emotions. That way is to get prepared for how you will feel if certain things happen. It's always a good time to get prepared for how you feel if the “what ifs” do play out.
Review Your Stop Losses

Almost 10 years ago I opened an account with Datek. It was one of the many online discount brokers started in the late 1990s and offered commissions of $7 per trade, or something like that. It was one of the best deals out there and their trading platform was one of the easiest to use too.

But that wasn’t the main reason for opening the account. Datek was the first online discount brokerage to offer trailing stop loss orders. They charged an extra $2 per order for trailing stops, but for those who used them, they were worth exponentially more.

Trailing stop loss orders progressively move up the stop point (the point at which your stocks will automatically be sold) as your stocks go higher. This unique structure allows you to ride a stock steadily higher and sell when it goes down past your preset limit.

The cost is that you will never make the perfect trade (which you probably wouldn’t make anyway). The benefit is you’ll never ride a stock all the way down to the bottom.

Mr. Market Is Not That Nice

These three moves are basic and obvious. Most investors (experienced and novice alike) fail to ever do them though and, in your editor’s experience, they always regret it.

For now though, I still don’t believe the markets are headed much lower in short-term. There’s just too much bearishness out there and too many investors expecting the markets to collapse. But I’m not about to let what I think or feel prevent me from navigating these markets successfully. And I hope you don’t either.

Good investing,

Andrew Mickey
Chief Investment Strategist, Q1 Publishing

Disclosure: Author currently holds a long position in Silvercorp Metals (SVM), physical silver, and no position in any of the other companies mentioned.

Q1 Publishing is committed to providing investors with well-researched, level-headed, no-nonsense, analysis and investment advice that will allow you to secure enduring wealth and independence.

© 2009 Copyright Q1 Publishing - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Q1 Publishing Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in