Over the years Uncle8888 have many coffee sessions with Readers/Starfishes who form the two groups of retail investors:
One group are newbies who have started out investing/trading for one or more years; but they didn't not achieve the investment return as expected. So they want to find out from veterans who have been in the market; and hopefully they can learn from veterans' experiences in the market; and see how to correct, revise or adapt their own investing method or strategies to achieve better performance.
The other group have been performing well during bullish market; but they couldn't clearly identify the phases of pull back, correction and stayed over-invested till market crash. Finally panic selling and locked in permanent losses to save whatever capital left on the table. They want to know how to survive market cycles and build sustainable retirement income or wealth for retirement.
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Thus the standard suggestion for non-correlated allocation & rebalancing...
ReplyDeleteRegular "profit taking" and add into cash / safe bonds during bull;
And buying under valued stocks during bear / correction...
But boring for most people & involves underperformance during bull 😉
Spur😁
You mean shorting in bear market?
ReplyDeletestock price keeps going down. How to buy low or lower and sell high?
ReplyDeleteNot crazy ... but need additional tools to avoid falling knives...
ReplyDeleteBasing patterns, exhaustion patterns, positive divergences, extreme sentiments versus prior crises, sentiments of smart money vs dumb money, etc.
Many of the best days in the markets occur in same clusters as worst days in the market ... due to fear-induced volatility ... many of these best days are dead-cat bounces in severe bears...
Scale in ...
Or simply to have a bit more patience to wait for some indication of price recovery & follow through before buying aggressively ...
Another thing to keep in mind ... buying bombed out blue chips not the same as buying country ETFs/funds...
ETFs/funds have built-in survivorship bias where underperforming companies get thrown out, while better performing companies are included...
Individual companies may face risk of slow or no recovery due to structural disruptions during/after severe bear markets e.g. some blue chip tech companies after 2000, or some blue chip US banks after 2008. Of course if you stuck with Amazon or Netflix then ho say liao!! LOL!