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).