STOCKS BEAR MAKRETS ARE SUPPOSED TO BE PAINFUL!

InvestorEducation / Learning to Invest Sep 19, 2022 - 10:23 PM GMT

The bottom line is that bear markets are supposed to be PAINFUL! And I can tell many investors feel that PAIN from the comments as they post the latest price of say Intel or AMD or TSMC or any other stock trading lower as if I have a magic button to press to make the stock go higher. So if you are feeling PAIN then go read my earlier recent articles on the psychology of investing in bear markets because bear markets are PAINFUL where the degree of pain experienced depends on what time frame on is focused upon.

I personally have yet to begin to feel any PAIN, maybe its a function of still being 25% in cash, maybe sterling dropping by 15% has inflated my portfolio so the bear market is shallower for me, though that is a double edged sword in that it has become harder to buy stocks during recent dips. My investing mindset is a function of the sum of all of my analysis, as a test for whether my investing mindset is reliable or not, back in March 2020, as you are all probably well aware by now I plowed all of my available cash on accounts into the tech stocks during the pandemic crash event before the worst of the pandemic ever materialised And then flash forward to Mid 2021 and I proceeded to SELL my stocks portfolio all the way into their all time highs, taking my AI stocks position down from near 100% invested down to about 20%. for that is what it took to satisfy my investing mindset..

And then the bear market began with sterling riding relatively high at $1.36, and I know from experience bear markets tend to be accompanied with dollar strength, that is the BANE of investing in US stocks, for when US stocks tend to be DIRT cheap then so does STERLING! Hence why I tend to cycle in and out of US dollars to help mitigate some of this unfortunate state of affairs as for hell knows what reason ALL of the tax free accounts such as ISA'S AND SIPPs do NOT allow one to hold US Dollars, well okay there is one that does which is the II SIPP, which I plan to open whenever I see sterling trade north of 1.31.

So what is my investing mindset right now?

My investing mindset says to -

1. Get to 85% invested as soon as possible, baring in mind that right now I have to contend with sterling at GBP 1.20 so it is not easy to do so unless I see deep draw downs in prices.

2. Don't make the mistake of trimming too much on bear market rallies because they could be off the final bear market low.

3. My stocks on average will be higher a year from now then where they trader today. How high? That is very foggy without undertaking in-depth analysis but I would imagine that AI stocks on average would be at least 10% higher than where they trade today and possibly as much as 40% higher.

And that's the state of my investing mind right now. NO Pain NO Fear, just eyeing the start of the next leg down that hopefully will take me further along my goal of reaching 85% invested.

IF IN BEAR MARKET PAIN THEN INVEST AND FORGET.

This anaysis is an excerpt from Stocks Bear Market Rally End Game that was as first made available to patrons who support my work.So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $4 per month. https://www.patreon.com/Nadeem_Walayat.

Most recent analysis includes -

Whilst my recent in-depth analysis is - UK House Prices Three Trend Forecast 2022 to 2025, where I pealed away every layer of the UK housing market I could think of to arrive at a high probability of trend forecast, no following of the consensus herd here! Whilst completion of my extensive analysis of the US housing market is imminent.

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My Main Analysis Schedule

UK House Prices Trend Forecast - Complete
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Your watching the British pound burn at the official rate of 9.4% per annum analyst.

By Nadeem Walayat

http://www.marketoracle.co.uk

Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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 trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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