We all know in all markets prices go up and down or they fluctuate. Ideally there is more up than down and over the long term if you invest in the profitable companies the total return of capital gains and dividends will be higher. However, when you need your money the market may give to your or take away from you. We also know markets never go up straight up, there are hills and mountains, but you do not know which is which until after the fact. This is one of the reasons why even in a bear market, you need to have some money in the market, because when the market turns the easy gains will be made.
There are many people who have been around the markets for years and write about it, one person is Gordon Pape, the Editor and Publisher of the Internet Wealth Builder. His recommendations are:
Protect core assets – banks, utilities and telcoms should be the bedrock of any well-constructed portfolio.
Keep quality losers – Many prices have gone down, but some companies are expected to bounce back faster than others, for example big technology – Microsoft, Apple and Alphabet
Use rising rates to your advantage – if you have cash in your portfolio, take advantage of rising rates by locking some of the money in a certificate of deposit, but less that a year maturity because rates are expected to go over the next few months.
Do not try to time the market – no one knows when the bear market will be over, until after it is over. But what you can do is wait until the S&P 500 has gone up 10 to 20%. The market is around 3,900 or 10% is 390 points or when it is over 4,200 plus. Pick a number.
Decide what you want to buy – make a list of what you what to buy and begin to follow the stocks. Many brokerage sites allow you to make a list to follow, use it. Use the research capabilities of your brokerage company. When you decide to buy, there will be good reasons besides to make money.
Keep your cool and take your time – there has been bear markets before, there has been bull markets before they will come again. Remember if you are investing for the long term, there should be limited rush to pick what to invest in, the hard part is choosing.
Linking to dividend paying stocks, we all want to make money on the stock market, however prices go up and down. One wonderful method to protect and earn money is to buy profitable stocks that pay dividends. In this fashion, no matter the capital gain (which is wonderful), every month or every quarter money comes into your account. Then you have choices on what to do with it.
There are more questions than answers, till the next time – to raising questions