I'm not saying you won't loose your money but tend to lead on the side of buy low sell high. And right now everything is low and probably won't be at that price in come 30 years when I have to retire. Of course I'm not waiting that long but if need be I will.
I don't think it is. There is no reason for the Dow or S&P to be where they are right now other than investor fear. This dive is not based on reason. The market may well stay depressed for a year or more, but it is not going to stay down. I am not play single stocks right now, except for a few that I have some money I would normally play black jack with, but good mutual funds are a great buy right now.
The one thing I do agree with you about is this is mainly about fear and confidence in the market. I hate to take a shot at the current president, but anything he says right now isnt really reasonating with investors.
I feel like I'm on mad money or listening to one of those financial advisors on the Today show. Dollar cost average, don't sell your stocks, continue to buy as the market goes down because there are bargains. Meanwhile, these guys have sold all their stocks and are in T-Bills. They can't say sell because that will just spread the panic. It would be irresponsible. My point was, just because the market is off 10% or 7% in this case doesn't mean there is a buying opportunity. The market can go down more than that and remain that way for a long time. History obviously tells us that if you ride it out, you will make your money back and more, but logically, if the country/world is in panic mode, losing 700 points in a day does not mean you will get your money back any time soon. My point for selling is that I could see the market much more likely at 8500 than 12500 when it was at 10500. There will be tremendous opportunity shortly but I like to see a little light at the end of the tunnel before diving in. That means, I don't get in at the bottom but on the way up.
This is merely called Risk Tolerance. If you have the free cash and time to wait these are the times to get in and wait.
Well, you have to sell in order to have cash to buy. Selling when the price goes up makes money. Buying when the price goes down enables you to make money. I just don't waste time or grief trying to time the turnarounds. I have targets that I think will make me money. When I hit the targets, I sell or buy. It works better for me than guessing the tops and bottoms. My point being that, just because the price could go even lower and offer a better buying opportunity, a 10% dip can still be a buying opportunity, even if it later goes to 15%. It could also turnaround and a buying opportunity has been lost. That's why I try not to sell 100 shares when I think I'm at the bottom. I'm either 100% right or 100% wrong. So I sell half of them at my target price going down and the other half I sell if a lower bottom appears. That way I can only be 50% wrong. Perhaps I'm a lot closer to retirement than you. I cannot afford to risk the farm on guesses. It pays for me to hedge my bets and spread the risk because preserving capital is as important as seeking profits when you're in your 50's. If you can risk it, then go for it. I'm a lot less confident that I (or anyone) knows where this bottom is and what the rebound will look like. By the time you are confident that the bottom has passed and prices are going up steadily, you may have missed the bargains. I need to risk some and earn some, rather than risk all and earn all/earn nothing.
That's the crux of it. But assessing risk is the part that gets left out of the equation. Everybody knows what type of risk they're willing to take but very few people are able to actually assess risk. Edit: Don't want this to come off like I'm a risk assessment expert, I'm not.
