What to do if there is a major correction?

[nizar]

Only one thing to do be out before it happens

from memory I read somewhere in you had bought General Electric a really strong US company just before the great crash and held it you would have got your money back
In 1957

Yeh well the problem with that is the most verticle gains are made in the period before the crash.

If you can live with that, then thats cool.

But there were people calling an end to the bullmarket at every correction/pullback since the October 2005 correction.
If you were a professional fund manager, you cant afford to lag peers by that much by 2 consecutive quarters, let alone 1.5years+, just because you wanted to get out early.

People always focus on the negatives there were people who CLEANED up in the 1920s bull and in the 1986 run.

Lets try to be one of those.

 

[Sean K]

Post bear cartoons?

Ha ha!!! Sensational. Where do you get those?!! Do you have bulls too? US bounced, or was it a dead cat?

 

[Mofra]

Wait until it bottoms out & then gear heavily into capital protected products

 

[BIG BWACULL]

One for the BULLS.
"There's a New Sheriff in Town. The Bull is Back."

 

[BIG BWACULL]

One for the BEARS.
"A Bear Market"

 

[Trembling Hand]

If you are a trader there is no way you would get into the market without knowing where you would get out if things go wrong. IF you haven’t done this first you are not in the business of trading you are kidding yourself. Every step should be....

Step.1 See plan
Step.2 Act on it.


http://tremblinghandtrader.typepad.com/

 

[wayneL]

Ha ha!!! Sensational. Where do you get those?!! Do you have bulls too? US bounced, or was it a dead cat?

I save them as I see them I've got some bull ones but saving those for later for when everyone is bearish. LOL

I reckon the dip buyers will have another go.

 

[Wysiwyg]

I save them as I see them I've got some bull ones but saving those for later for when everyone is bearish. LOL

I reckon the dip buyers will have another go.

Not having experienced a long term declining market , apart from shorting stock I can`t see any other way to make a quid.Even then ,most stock aren`t shortable.What gives.
I don`t see the logic in wanting a declining market unless you short sell.Any enlightenment will be taken on board.

 

[wayneL]

Not having experienced a long term declining market , apart from shorting stock I can`t see any other way to make a quid.Even then ,most stock aren`t shortable.What gives.
I don`t see the logic in wanting a declining market unless you short sell.Any enlightenment will be taken on board.

If you want scrip to nail to the bottom drawer, you want to buy at value. In bull markets with stretched values, any purchase must be viewed as potentially temporary.

Only through a bear market will there eventually be purchases available ah-la Buffet value investing (broadly speaking). My bottom drawer is not nearly full enough and it will not be filled with overpriced crap.

Bear markets are cleansing and even out a host of financial and social excesses that occur in bull markets.

From a trading point of view, bear markets are far more volatile which is manna to the professional trader. A bear market will separate the wheat from the chaff in the trading stakes. the longer a bull market goes on, the more difficult will it be for bull market heroes to survive.

More on this later....

 

[Wysiwyg]

If you want scrip to nail to the bottom drawer, you want to buy at value. In bull markets with stretched values, any purchase must be viewed as potentially temporary.
Only through a bear market will there eventually be purchases available ah-la Buffet value investing (broadly speaking). My bottom drawer is not nearly full enough and it will not be filled with overpriced crap.

Bear markets are cleansing and even out a host of financial and social excesses that occur in bull markets.

From a trading point of view, bear markets are far more volatile which is manna to the professional trader. A bear market will separate the wheat from the chaff in the trading stakes. the longer a bull market goes on, the more difficult will it be for bull market heroes to survive.

More on this later....

Thanks wayneL ,

I understand what you say but the bit that I highlighted is in my opinion a direct relation to demand for product or service.Therefore `term` is directly related.
For example if the price of uranium dropped tomorrow then so would the u stocks.A temporary hold of stock in a product or service in demand will see one folding at the first decline.Even with this general view any individual stock can suffer the consequences of negative sentiment.

I think overall everything is in proportion.

 

[purple]

Wait until it bottoms out

you mean....back to where it all started?


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[numbercruncher]

Selling a year to Early is better than selling a day to late