Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Investing in the Tulip Crypto Mania 2021 - 19th Jun 21
Here’s Why Historic US Housing Market Boom Can Continue - 19th Jun 21
Cryptos: What the "Bizarre" World of Non-Fungible Tokens May Be Signaling - 19th Jun 21
Hyperinflationary Expectations: Reflections on Cryptocurrency and the Markets - 19th Jun 21
Gold Prices Investors beat Central Banks and Jewelry, as having the most Impact - 18th Jun 21
Has the Dust Settled After Fed Day? Not Just Yet - 18th Jun 21
Gold Asks: Will the Economic Boom Continue? - 18th Jun 21
STABLE COINS PONZI Crypto SCAM WARNING! Iron Titan CRASH to ZERO! Exit USDT While You Can! - 18th Jun 21
FOMC Surprise Takeaways - 18th Jun 21
Youtube Upload Stuck at 0% QUICK FIXES Solutions Tutorial - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations Video - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction - 17th Jun 21
Stocks, Gold, Silver Markets Inflation Tipping Point - 17th Jun 21
Letting Yourself Relax with Activities That You Might Not Have Considered - 17th Jun 21
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! - 16th Jun 21
The Federal Reserve and Inflation - 16th Jun 21
Inflation Soars 5%! Will Gold Skyrocket? - 16th Jun 21
Stock Market Sentiment Speaks: Inflation Is For Fools - 16th Jun 21
Four News Events That Could Drive Gold Bullion Demand - 16th Jun 21
5 ways that crypto is changing the face of online casinos - 16th Jun 21
Transitory Inflation Debate - 15th Jun 21
USDX: The Cleanest Shirt Among the Dirty Laundry - 15th Jun 21
Inflation and Stock Market SPX Record Highs. PPI, FOMC Meeting in Focus - 15th Jun 21
Stock Market SPX 4310 Right Around the Corner! - 15th Jun 21
AI Stocks Strength vs Weakness - Why Selling Google or Facebook is a Big Mistake! - 14th Jun 21
The Bitcoin Crime Wave Hits - 14th Jun 21
Gold Time for Consolidation and Lower Volatility - 14th Jun 21
More Banks & Investors Are NOT Believing Fed Propaganda - 14th Jun 21
Market Inflation Bets – Squaring or Not - 14th Jun 21
Is Gold Really an Inflation Hedge? - 14th Jun 21
The FED Holds the Market. How Long Will It Last? - 14th Jun 21
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21

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