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Is Red the Color of May? Relax, Markets Acting Normal - Voice of the People
5/9/2012 6:00:00 PM
Zacks highlights commentary from People and Picks Member
Is Red the Color of May? Relax, Markets Acting Normal
Sitting out during capitulation moments and trying times when the markets is acting as it is can be a challenge for investors. Taking a breather of this kind can help you maintain position flexibility. When markets are acting as they have the last few days, it might be good just to sit on your hands during capitulation moments. One needs to resist the temptation to join the herd and sell into the panic. However, one exception, never ever let a winner become a loser.
Part of your homework is doing risk analysis. Most investors don't do risk analysis. It's something every investor should do. That's why I have always stated in my blogs during the last five years to hedge your winnings. I do it, as documented in my blogs, with SPY puts. I call it necessary insurance. I don't buy the SPY puts with the idea of making money on them, but when the time comes, as now, they provide the blanket of cushion I need. It's call insurance.
It's a bull market pause.
Just watch others give up, then as the smart money will do, jump in for the killing!
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