Actionable insights straight to your inbox

Equities logo

How to Handle the (Expected) Correction

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
Jordan Kimmel is a Portfolio Manager for Gitterman Wealth Management. Phone: 848-248-4290Email: [email protected] With over 30 years of experience in the financial services industry, both as a retail broker and fund / portfolio manager, Jordan is the creator of the FACTS® Stock Selection Process, which employs a unique holistic and quantitative analysis on the integrity and sustainability of over 2,000 US companies. Jordan’s FACTS® method identifies organizations with: Financial Strength Accounting Conservativeness Corporate Integrity Transparency Sustainability / ESG (Environmental, Social, and Governance) Metrics FACTS® analyzes the largest and most liquid companies, and also incorporates Jordan’s Magnet® Investment Strategy, one of the first strategies of its kind to combine the best tenets of value, growth, and momentum of company fundamentals. Magnet® has been licensed to several leading institutions around the country, and Jordan appears frequently on several major financial TV networks, including CNBC, Fox Business, Bloomberg, and ABC News, among others. He has also been quoted extensively in several publications, including Forbes, The Wall Street Journal, and U.S. News & World Report. He is the author of two books, the most recent being “The Magnet Method of Investing.” (Wiley, 2009).
Jordan Kimmel is a Portfolio Manager for Gitterman Wealth Management. Phone: 848-248-4290Email: [email protected] With over 30 years of experience in the financial services industry, both as a retail broker and fund / portfolio manager, Jordan is the creator of the FACTS® Stock Selection Process, which employs a unique holistic and quantitative analysis on the integrity and sustainability of over 2,000 US companies. Jordan’s FACTS® method identifies organizations with: Financial Strength Accounting Conservativeness Corporate Integrity Transparency Sustainability / ESG (Environmental, Social, and Governance) Metrics FACTS® analyzes the largest and most liquid companies, and also incorporates Jordan’s Magnet® Investment Strategy, one of the first strategies of its kind to combine the best tenets of value, growth, and momentum of company fundamentals. Magnet® has been licensed to several leading institutions around the country, and Jordan appears frequently on several major financial TV networks, including CNBC, Fox Business, Bloomberg, and ABC News, among others. He has also been quoted extensively in several publications, including Forbes, The Wall Street Journal, and U.S. News & World Report. He is the author of two books, the most recent being “The Magnet Method of Investing.” (Wiley, 2009).

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).

 
A weekly five-point roundup of critical events in fintech, the future of finance and the next wave of banking industry transformation.