As I am writing this (March 4th), we saw yet another brutal selloff for the third day in a row (with 4.6% S&P and 7.5% Nasdaq aggregate declines). This seems unnerving after a huge up day on Monday. So in the spirit of threes (this being the third month of the year), lets answer three of your top questions!
Q1) So what should you do amongst this selloff? A) Nothing!
Remember the second principle: market is unpredictable. So while it could be the dreaded “I” word causing the selloff or anything else, you have to keep the courage to hold onto losses when market tanks. If I sell the positions I have in my sheet, I will book hefty losses!
(And of course, you can trim your positions in profit but I have none publicly in the sheet I started tracking on March 1st)
Q2) Why shouldn’t I buy, everything is so cheap?
A) Sure it is, but can’t it get cheaper? People thought Tesla at 750 was cheap and it’s hit 600 today. Its better to buy things on the way up than catch them on the way down!
Q3) How do you know when things have turned?
A) Well, without getting into technicals (keeping it easy here), I will tell you! And you will see buys in my sheet as well.
That being said, I suspect we are close to a short-term bottom as we had some Big Tech names being up today on a huge Nasdaq down day (with technical breaks in trend).
Or maybe I’m in denial like Mr Cramer says. Time will tell….and so will this blog. Tell me what you think!