Selling never feels good and people have hard time to handle it. It’s their money and they fear them getting lost. They start rushing to protect the value of their portfolio and start selling. Pouring oil into fire.
However, this is not the time for panic and time to start selling. If you knew this was coming, you should have sold three days ago. Today, it is probable too late to be selling. We may be already bottoming this small correction (as on now 6.4% decline). Sure, it may go lower in the next few days. We can correct additional 4%, or 14%. But do you know it? Do you know for sure? I don’t. And I do not ant to speculate. This correction may be in the range of the previous corrections, or it may exceed and go down 20%, or 30%. But given the US economy is relatively strong, a larger than 20% correction would not be justified. And even if it happened, it would be a GREAT opportunity.
And recoveries or bounces can be as sharp and fast as the drops. You know that bear markets rallies can be as dangerous as the selling itself. Shorting now may catch you on the wrong side of the market.
And so, when everyone is panicking and selling due to some bogus reason, I decided to add to my portfolio. Lately, I started adding an index to my portfolio in addition to my dividend stocks.
So I added 1 SPY ETF. And if this market keeps sliding lower, I will be adding more shares. I will be adding individual stocks too and selling puts. But, I need to wait a bit for the dust to settle.
Remember, this will pass too.
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