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Dealing with Bear market
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When the stock market was at its peak many people who were left standing at the side lines had resolved they will buy if the index ever came lower. Where are those investors?
Well seems like they can not muster the courage now to take the plunge. I do not mock them because it takes a courageous investor to put his money where his mouth is or in stocks in a bear market. The stock market is showing no signs of recovery and the news has not been good to say the least.
Those who are already invested in the stock markets the message is that “you have got nothing to lose that you have not already lost.” Stay with your investments and do not sell in panic now. The retail investor typically sells at the bottom of the market and buys at the top. Be the smart one and hold on to your investments. The journey is never one way. What goes down must come up.
The stock market scenario will continue to shift — for better or for worse. Lamenting about our lot in life or worrying about what will be is wasted energy. Focus on solutions, be it opportunities in the marketplace or capital preservation and risk reduction. There will be winners in the new world, and there is no reason why you can’t be among them. Perspective is crucial as we find our way and do the best we can. With a little luck and a lot of discipline, you might even enjoy the journey.
No matter how strongly you feel on a given position, you must defer to the principles of discipline when trading. Always attempt to define your risk and never believe that you’re smarter than the market.
It’s not necessary to trade everyday, it’s only necessary to have a high winning percentage on the trades you choose to make. Sometimes the ability not to trade is as important as trading ability.
Emotional decisions always have a way of coming back to haunt you. If you’re personally attached to a position, your decision making process will be flawed. Always take a deep breath before risking your hard earned money.
Sell hope, buy despair. Read more about stock market sentiment.
Good traders know how to make money but great traders know how to take a loss. For if there wasn’t risk in this profession, it would be called “winning” rather than “trading.”
You must be clear why you are investing in the stock market.
It’s tough out there. Tension is mounting on Wall Street, Dalal street in fact on all streets, stateside friction is growing ahead of the election( U S and Indian), and geopolitical angst(Tibet, Iraq, you name it) is manifesting around the world. It’s enough to make you want to turn it off.
It is time to buy stocks when there is blood on the street. I have my shopping list ready and am keeping a close watch on those mouth watering prices. How about you?
There are certain things you need to watch out for while investing in a bear market. Read what the investment guru Warren Buffet has to say and learn more about surviving the bear market. |
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