How to Handle the (Expected) Correction

Jordan Kimmel |

market correction, stock price drop, stop loss limits, profit taking, capital preservation

Having a tactical game plan is critical when handling your portfolio. I have seen so many “investors” panic and act completely emotional, when that is exactly how not to make money over time. As Mike Tyson liked to say, “Everyone has a game plan – until they get punched in the face!” I believe we are set up for a significant correction before we resume an upward path in the 4th quarter of this year. I have no idea what will start the move lower- perhaps it will be geo-political rather than pure economics- it does not really matter. Make sure you have a plan in place for this (expected) correction.

Here are my simple, age-old suggestions:

1)      Start now by reducing any margin. Margin can be the Achilles heel even for the best of investors.

2)      Tighten up stops now for all “trading positions”.

3)      Draw a line of distinction between stocks you would hold during a bear market, and positions you are less confident about.

4)      Don’t sit tight now- and then sell once the overall market is down 15%!

I do not see anything like the two Bear Markets we experienced in the 2000-2009 period. Those were two generational Bear Markets–extremely rare and unseen in one decade. I am expecting a 10-15% move lower. That does not mean I have sold everything and am waiting on the sidelines. Instead, I am pretty fully invested, almost equally long and short, in my best ideas generated through The Magnet® Stock Selection Process. Most importantly, I have a plan and I’ll stick to my discipline. Make sure you are ready and have a plan. I do feel some sharp turns ahead!

By Jordan Kimmel, Chief Investment Officer at Investview, Inc. (INVU).

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
SJT San Juan Basin Royalty Trust 6.55 -0.05 -0.76 222,858
TCK Teck Resources Ltd n/a n/a n/a n/a
CHS Chico\'s FAS Inc. 16.55 0.42 2.60 2,443,406
N Netsuite Inc n/a n/a n/a 0
PEIX Pacific Ethanol Inc. 9.85 0.90 10.06 952,461
FNHC Federated National Holding Company 18.54 0.34 1.87 71,386
RN:CHI Rio Novo Gold Inc. Ordinary Shares n/a n/a n/a n/a

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