I usually like to spend my time with these articles writing a funny analogy to a golf or fishing trip or something about how investing can be like raising kids. Today's message, however, is simpler and more straightforward.
Folks, I've written you a lot about the market's wild gyrations over the last month. I've told you that "volatility creates opportunity," but I'm here to tell you today that things are different.
I spent much of yesterday thinking about you and your portfolios. Like me, I'm guessing that you have accounts that are set up for your retirement and other savings, plus your accounts for speculation trades.
This is wise, but there's something we all must consider today, and for the next month or so... this isn't even a speculative market; it's chaos.
I don't say this to strike fear - 10 minutes in front of a television will do that - but instead, I want to make a point. Speculation still depends on an inherent ability to forecast something that may happen. This market crossed a line where speculation ended and chaos began last Monday.
Now, we need the markets to reprice risk and begin rebuilding back to a new normal. It will happen.
How long will this take? Nobody can answer that question, but I do know that I'll be here with you the whole time, and when it does, we'll pick-up right where we left off. We will have opportunities here and there along the way, while we look for the market to get a fundamental reset in order to be anything less than dangerous.
Until then, here's what my 30 years of experience tell me...[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
Your Three-Step Approach to Follow Right Now
Here's my advice for what to do right now...
- Keep your powder dry, and hold cash. Most people think they're losing money by holding cash. In a market like this, you're making money with a cash position by not losing it.
- Hold back on the temptation to call a market bottom. It's okay to miss the bottom by 10%, and there will be plenty of upside to catch when the time is right. We'll show you where and how.
- Don't get wrapped up in the tangle of the tape. It's easy to convince yourself that you should make a move when the market gyrates 5% in just a few hours. Watch and learn about these moves, but don't participate. We can also help when it's time.
Now, I'm watching the daily activity as closely as ever, along with the entire staff here at Money Morning. With hundreds of years of combined experience, this group will stay tuned in to the markets like no other group I've worked with.
You'll hear comments, advice, and maybe a few stories in between, but we'll be doing everything that we can to help and direct you through this historic event.
I'll be sending you additional articles on the market to address some questions you may already have. Questions like, "What should I do if I didn't go to cash?" or "How can I generate income when interest rates are going to zero?"
In addition, I would love to hear your questions and comments. Anything that you would like to share with your fellow readers. Take a moment to make your comments here, then I'll go through them to share some of your concerns and questions with your fellow readers.
I'll be back with you soon to start digging through the next steps for this market and to answer a few of your questions.
Until then, stay safe, listen to the officials, and try to relax.
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About the Author
Chris Johnson (“CJ”), a seasoned equity and options analyst with nearly 30 years of experience, is celebrated for his quantitative expertise in quantifying investors’ sentiment to navigate Wall Street with a deeply rooted technical and contrarian trading style.