Feeling the Market Dread

I don’t know about you all, but I have been speaking with a lot of people out there recently and there is a general feeling of dread and uncertainty in the markets. The people making these comments seem to be very quick to react to a few down days in the past few weeks. I have been quick to remind them that we have been on a pretty steady up tick in the markets for the past couple of years and that there may be more tough times to come.

I then ask them what their strategies are in these types of markets. I have received all sorts of responses – everything from selling all energy holdings and sitting on cash to buying more. Which of these is the right answer I do not know, but I do know that my inclination is to keep buying stocks that appear cheap and hold on for the long term. Given my 30+ years to retirement I am more than comfortable doing this. They key thing I like to impart to people that will listen (and that is very few!!) is to pick a strategy and stock with it. There is nothing more harmful than whaling around from one hot thing to the next. Pick an asset allocation and invest to it. Do not waver. In the end it should all work out.

Note: I said should, not would. If I knew what would happen I would own a tropical island and be living there right now.

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• Using Stock Screeners to Identify Stocks of Interest
• Recession, Shopping, and Investing