Stock market drops: Relax, no time for panic selling, time to look for stocks, mutual funds or ETFs you want if we have a real correction
On Aug. 18 I warned readers of this blog to be careful about buying into the market because it had shot up 50 percent from the bottom in just a few months.
Today, when the DOW dropped 186 points, and we might be facing a 5 to 15 percent correction, my advice is for you to sit back and patiently watch and learn.
I am not a financial advisor, but was business editor for the Courant for 12 years, and have been a student and a player in the stock market for almost 40 years.
One thing I learned is that the only way to make money is to control your panic buying or panic selling emotions and to do the opposite of what everyone else is doing.
When newspaper headlines are screaming that the markets are tanking, its time to be looking for sector mutual funds or ETFs, or beaten down great companies. If you liked UTC, for instance at $56, why would you not like it better if it sunk to $45?
And when you see the bull on the cover of major magazines and everyone talking up the market, its time to get out.
I can’t tell you what will happen tomorrow or the next day or week or month. No one can. And if anyone tells you they can, they are either fools or liars.
But I can tell you that either now or in the next few weeks we will have a correction. The market went up too high, too fast.
A correction can be great. It weeds out the weak hands, and permits those who had been left out of the market, or sold out in March, to get back in, preparing us for the next leg up, which I think will probably happen.
So stay cool.
This is what I wrote almost two weeks ago, you can find it on this site:
“After the S&P 500 just shot up 50 percent, this is no time to be getting in the market. While it can still go a little higher, my hunch is that we will have a correction soon. I know it feels safer to invest when the market is going up, but trust me, its smarter to invest when the market is down.”
Similar Posts:
- Investment advice: Be careful as the bulls run, time for caution
- Stock market rebounds: time to worry, consider taking some profits off the table, have $$$ left to buy in during correction
- CtWatchdog’s Personal Finance Series: Part 7 – An Unbiased Look At Jim Cramer
- Investing: Look into ETFs and Vanguard
- Ski Market Preliminarily Agrees To Honor At Least Half Of Gift Cards’ Value
5 Responses for “Stock market drops: Relax, no time for panic selling, time to look for stocks, mutual funds or ETFs you want if we have a real correction”
Leave a Reply
Sponsors
I agree with a correction is due, but maybe not till we go a little higher…after all, everyone is expecting it and the stock market fools the most amount of people the most amount of time. So, like the Dog says, when everyone is leaning one way the Mr Market will usually give you a head fake and do just the opposite. I like the prospects long term though but like Asian markets like China, India and Brazil even more. China is truly the super power of the world now just as we were from the 20′s till recently. Rick Caplan
See the movie “Stock Shock” just out on dvd for an education on the market.amazon has it and the trailer is at http://www.stockshockmovie.com
Back in April while Ford was down to $4.84/share, I purchased 100 shares. I have since seen it go up and down but never below my purchase price… thankfully!
George, thank you for your words of wisdom from your many years in business.
George, this is excellent advice. Your experience as business editor has served you well!
Truth be told, it was the experiences I had losing lots of money that provided the lessons.
The Dog.