Well, steady as she goes is the phrase of late. I have been gradually buying and selling while listening to the constant BS on the television. I’ve never heard more negativity and the sky is falling than I have lately. Man, it gets really old. People have been saying we were headed for a recession and the market is going to crash for years now. Everyday they continue to ask “so is this the top” and it makes me nauseated. Everyday the market goes higher. Yes, understand this cannot last forever, but I truly believe things are better than some would like you to believe.
PLAN TO NOT CARE
If you plan your portfolio correctly you can safely ignore everything everyone says or debates especially in the short-term. Sure, there are geopolitical events and individual corporate news that can increase volatility and cause dips, but these moments should be considered buying opportunities. Overall I believe things are quite good.
I wake up each morning hoping for a serious market crash. I want 1000 points off the DOW. I want the NASDAQ to get crushed so that everyone can finally say they were right and we can move on. I want a crash that scares the tech sector so badly that my favorite stocks get hammered for no reason!
If you keep this mentality, buy accordingly, keep at least 30% in cash at all times then the market cannot hurt you. Actually, there is one more: always plan to call the shares regardless. If your goal is to slowly accumulate shares and you’re using DITM, far out expiration options then you have nothing to worry about. All you have to do is make sure you are buying strikes you are willing (and can afford) to buy. This way if a trade goes against you then you can simply call the shares and wait. Eventually things will recover (if you’re buying good companies). You must expect declines and anticipate them. Be prepared.
I heard someone say this morning that if you, as an investor, cannot handle a 7% decline in a stock then you simply do not and should not be in the market. Period. That’s a 7% decline! I agreed completely. In fact, I look for 8% declines so I can add to positions when most are capitulating. If you are scared to be “down” then you need to walk away.
Plan to not care and you will be fine…I promise. Panic is not a strategy…but holding long-term is.
During my travels this past weekend I was amazed at the number of new construction projects I saw across the South and the size of the projects. My goodness there is some serious building going on out there. This along with the fact we counted 24 new car temp tags on Sunday alone (after we decided to start counting) I would say auto sales are good and people are out buying. I’d never seen so many new cars! The population is growing, and things are cooking right now. Take advantage while you can…
KNOWING IS HALF THE BATTLE (G.I. JOE)
All it takes is looking around and you will notice things that can and will make you money. We stopped at a Wendy’s [stock_quote symbol=wen] in Texas for lunch on Friday and I had the pleasure of trying one of their new Power Mediterranean salads. Wow! I purchased a JAN 15 CALL while eating because of that salad. Good for Wendy’s for branching out!
I watch everything when I’m out and about and I keep an eye on my favorite companies. How many people are shopping, are the stores clean, do they have what I need, is the staff friendly and happy, what do the bathrooms look like? Bathrooms, in my opinion, are always the first to be forgotten. If the bathrooms are clean then more than likely management has control. I watch everything and what I see plays a huge role in what I own.