Warning .... A Buying Opportunity is Looming on the horizon !

a reply to: combatmaster

Tough one, especially now atm. I hesitate to make any specific recommends. I dont wish to lead anyone wrong.

But, I have steered clear of any energies. Including utilities. Too much natural termoil anymore.

I wish you hadnt asked, as my focus currently is in funds. They do a better job making picks and studying charts than I do.

I am in love with Vanguard. Especially the Admiral funds. Very low load. I am completely out of international funds. I like small cap to mid cap for a recovery. Smaller companies can steer quicker than large bloated companies to capture change. With exception of google or apple though.

At this point I like Tesla, believe it or not GM, certain discount food and personal care chains and manufacturers, and healthcare. Not the research end of healthcare, but common human health. Lots of people getting older lately.

BUT , I do not want to make ANY specific recommendations for you or anybody. I dont wish to at all. I am not a broker nor do I pretend to be. Choices should be made on your comfort level of risk, age, financial situation, etc.

If you are just starting, get a Robinhood account and play with 500 bucks while doing background reading on companies that interest you. I always like to look at companies that I buy their products and like the products. Keeps me familiar with what they do.

Buy Copper before the price goes back up

Warren Buffett said...

“Be greedy when others are fearful; be fearful when others are greedy.”

An interesting pdf (if the link works lol)...

www.edelmanfinancial.com...

I have been watching a list of around fifty stocks for quite some time. I saw an opportunity after the recent slide in the markets and I decided to go for it.

Long story short: +20% in two days.

Buffet was right - be greedy when others are fearful and be fearful when others are greedy.

a reply to: Vroomfondel

Thats how ya do it.

Fear is a bad emotion to follow. Many others just snap up bargains off the backs of the meek.

Dont get married to your gains. Sell when you make some.

Dont get married to your losses. Losers will just bring you down. Sell the dogs and move on.

Cheers.

The big boys have been screwing the little guys. They do it and dont even blink. Thats what they do. It is their life.

These times are one of the rare moments once every decade or so where the little guys have a shot at making a fair buck.

a reply to: smirkley

I would normally agree and take the money and run, but, in this particular case I think there is much more to come. It is still down roughly 80% from its 52 week high. This is fun money also. I am not talking about blue chip stocks here. I do own some of those also but those tend to be long term investments and don't make huge moves. The broker fees and taxes wipe out any smaller profits you might make unless you are trading whole blocks, but I don't have that kind of cash...wish I did...

a reply to: Vroomfondel

Sounds good and makes sense.

Kill the broker fees and get a robinhood account.

www.Robinhood.com...

originally posted by: smirkley
a reply to: Vroomfondel

Sounds good and makes sense.

Kill the broker fees and get a robinhood account.

www.Robinhood.com...

Thanks for the thread; it's been interesting and I feel I've learned a bit

Didnt do so bad today either. Although I suspect another dip next week. Just doing hit and run on a couple stocks. When this period of instability calms down it will be interesting to see my short term roi.

Knowing very little about investing, what I have decided to do right now is gather the opinions of many, many different people who know far more than I do, and then see what consensus emerges. I know it's impossible to time the market with any extreme level of confidence, but I figure that's safer than just stumbling in the dark right?

So I've been going to many different sites that seem to have decent confidence from other investors, and looking at their array of technical and classical signal analysis stuff. (Not software, just various publications that they show in aggregate on said sites.)

So far, for every site I've visited, and 99% of all the analyses, all of the options available in the family member's 401K to which I referred earlier - with the exception of the guaranteed income fund - say strong sell signals. And have for days, despite gains - some significant - made in the last day and a half or so.

So, not having confidence in my own knowledge, I'm going to just go with that for the moment. If all or most of them suddenly switch to buy and mainstream news suggests a recovery rather than a larger downward correction or bear market or what not, then I'll put a small percentage into those that say strong buy signals. But not enough to risk their retirement which is fairly secure at the moment, thankfully.

I figure it's best to be cautious at the moment. What do you think?

Peace.

a reply to: AceWombat04

I do not disagree at all. There is a correction ongoing and you are correct (and smart) when referring to other sources.

That said, generally, and especially in 401k, my play is long term. I do not juggle my retirement but instead aim for a risk balance I am comfortable with. Once or twice a year I consider reallocation if it seems prudent. Retirement accounts are not an area where you should do short term speculation or try to time markets. That is a fools game. But it certainly is where almost all of my dollar cost averaging occurs by nature of the design and paycheck witholdings.

I think, and I hope I made clear earlier, that this thread and my suggestions ARE short term market plays.

Essentially this thread is to suggest that this volatility can be taken advantage of by the common public to make a couple of quick (taxable) scores. One can make a day or two round trip capturing some gains, or one could dollar cost average on the way down and back up when the market recovers. And it will eventually.

Alot of your method depends on your goals or stomach for risk. I can stomach quite a bit, as the moneys I maybplay with are outside of my needs. If I win, great. If I lose, it sucks. But my family still eats.

You have shown one very important thing that anyone who invests in any style SHOULD do. Read. Find experts that agree with facts. And then balance that with your goal/risk objectives or tolerance levels. A fool would knock you for that. I certainly will not.

Oh, and only to add my opinion...

I feel this correction is only a result of the current crisis in China. Alot of big market makers got caught with their pants down while overexposed.

But that one thing does not facilitate a true crash. The domino stops there.

At least for the moment that is.

Some definitions to help understand the dynamics of negative market moves...

It is important to note the distinction between a crash and a correction, which can be a bit sticky at times. A correction is supposedly the market's way of slapping some sense into overly enthusiastic investors. As a general rule, a correction should not exceed a 20% loss of value in the market. Surprisingly, some crashes have been erroneously labeled as corrections, including the terrifying crash of 1987. But a "correction," however, should not be labeled as such until the steep drop has halted within a reasonable period.

Why a correction is considered healthy,...

Definition: A stock market correction, or pullback, is when the stock market declines 10% in a relatively short period of time. It's a natural part of the stock market cycle. As a matter of fact, in each of the bull markets in the last 40 years, the stock market has had a correction. In fact, experienced investors often welcome a correction to allow the market to consolidate before going toward higher highs.


A stock market correction can be caused by some kind of event that creates fear and subsequent panicked selling. It can be a gut-wrenching time, and many beginning investors will feel like joining the mad dash to the exits. However, that's exactly the wrong thing to do. Why? The stock market usually makes up the losses in three months or so. If you sell during the correction, you will probably not buy in time to make up your losses.

Corrections are inevitable. When the stock market is going up, investors want to get in on the potential profits.

This can lead to irrational exuberance. This can make stock prices go well above their underlying value.

Why a Correction Is Not a Crash

A correction is different from a stock market crash, which is when stock prices plummet more than 10%, in just one day. Crashes are so frightening, they usually lead to a bear market. That's when the market goes on to drop another 10%, leading to a decline of 20% or more.

Unlike a correction, a stock market crash can cause a recession. How? Stocks are how corporations get cash to grow their businesses.

If stock prices fall dramatically, corporations have less ability to grow. Businesses that don't grow will eventually lay off workers to stay solvent. As workers are laid off, they spend less. Lower demand means lower revenue. This means more layoffs. As the decline continues, the economy contracts and you have -- Voila! -- a recession.

If a correction is relatively benign, and a crash can cause a recession, how can you tell the difference? It's not easy. A correction can turn into a crash if the stock market declines more than 10%. Trying to decide if a correction is turning into a crash is known as timing the market. This is nearly impossible to do, since there are so many factors that can influence the direction the market goes in. That's why the best strategy is to have a diversified portfolio with a balanced mix of stocks, bonds and commodities. You will profit from market upswings with the stocks, and be protected from stock market corrections with the bonds and commodities. With diversification, you will feel safe to ride out any stock market corrections.

If you look at the history of the Dow, you'll see that most recessions are accompanied by stock market declines of 30% or more. These declines are part of the normal downturn in the business cycle, and are tied to larger economic events. That's different from a stock market correction, which can occur when the economy is still in the expansion phase.

Why would the market correct even when economic data is good? The stock market is an effective leading economic indicator. That's because investors usually look at future expected earnings, itself a prediction of corporate profits. Investors buy or sell stocks based on these future projections of the business world. If investors are overly optimistic based on their expectations of future performance, they can create a rally that doesn't match current economic performance. If the market gets over-extended, then any bit of news that creates doubt can cause a mild sell-off.

However, as long as the future trend still looks optimistic, the buying will resume and lead to an even stronger bull market rally. In other words, a stock market correction can help the stock market catch its breath and hit even higher peaks.

a reply to: smirkley

Oh, definitely. I would never take a short term outlook with a 401K. I just meant that once it's clear a real rally that could last for months or a year emerges without fear of further (major) corrections, let alone any sort of crash, I would consider putting a small percentage back into the options in their 401K that have historically done well over many years. The only reason I didn't do that already is because in 2007/2008 all the options available to them did atrociously, and everyone told me if there WAS a crash this time (which no one was sure wouldn't happen,) it would be bad news potentially.

They were fortunate in a sense because they were wary and just bought gold prior to 2007, so if anything they sort of benefitted. But since then they've rolled that over into the 401K so they've asked me to be very conservative with it, but to open up SOME small percentage of their monthly contributions to risk again once it's clear there's a "rising tide that lets all boats float" so to speak.

They missed out on benefitting from the recovery we've had since the 2008 crash so I think they're hoping to get a little bit out of the next rounds of QE and the rebound from any larger downturn that might be coming over the long term and hoping this recovery continues unabated after this latest China-related blip. But they want me to be absolutely certain there's not an impending crash coming so they've asked me to wait until that aforementioned professional consensus says it's safe to dip their toes in the water again before doing so.

Thanks so much for the recommendations and insights. I will definitely keep it all in mind.

Peace.

The best advice I could give is do a lot of research and move confidently with your money. I made the mistake once of telling someone a specific stock to buy. Or rather, I talked about it a lot as I had been watching it for a very long time, and it seemed to be in a repeating cycle. It would nearly double over a period of four to six weeks, then spend about two months falling back. It did this repeatedly for quite a long time. A co-worker asked if I thought it would do it again when it neared the bottom of a cycle. I said it probably would. I didn't buy it, but I didn't say I was going to. At any point in this cycle the stock has two potentials. It can repeat the cycle or it can bottom out. Stocks don't move like that normally. On this particular occasion, it bottomed out. My co-worker hasn't spoken to me since then. (he lost a lot of money on that deal)

I definitely recommend looking at a 401k as a long term vehicle. Although many 401k's allow you to trade on a daily basis, or near to it, I don't recommend it. A 401k is not the kind of investment you want to try to score a daily trend profit with. The day trader "hit and run" style should be reserved for fun money. Do good, lengthy research on your 401k investments and move with confidence. Be prepared to ride out the lean times and try to have something in a cash option, or at least very low risk, to add in if and when there is a large correction. It greatly reduces the amount of recovery the market has to make in order for you to regain your losses.

In a bear-ish market its hard to pick anything with great confidence but the lower risk investments are always a good bet. In a bull-ish market I tend to gravitate towards growth equity and value yield funds. Large and mid cap growth and value and good too. Small cap funds tend to make bigger gains and bigger losses (are more volatile) and can be profitable if timed correctly or disastrous if not.

IPO's are fun and can make money for you, but, they are very risky. I put them in the fun money category.

Investing doesn't have to be dangerous to be profitable. The key is to start while you are young. It doesn't take much from each paycheck to get started when you are in your twenties. If you can stand losing a little beer money now it will pay off big time later. The longer you wait, the worse/harder it will be for you when it comes time to retire.

I read somewhere but I cant find it again,...

If a young person is able to put $2000 per year in an IRA or 401k starting at 18 and stopping at 30, they will amass about three times the retirement funds at retirement than someone that saves $2000 per year the same from 30 to 65.

But when you are young you never have to worry about such nonsense.

a reply to: smirkley

I remember seeing something like that. The difference is huge. And its not a lot of money. For most people in their twenties we are basically talking about putting a small dent in their entertainment budget. That's really about it. And it makes such a big difference in the end. I wish more parents, schools, etc, would stress the value of such a simple thing.

a reply to: Vroomfondel

I agree. But all I ever get is immature eyerolls. So I let them learn for themselves and come to the realization at 40 or 50... "oh crap!...Not gonna have enough!"

Something about biting into their movies, cars, girls, eating out, clothes, and mostly fun budget just seems to get in the way of positioning themselves for being done with saving for retirement after 30. Unless they want to really enjoy retirement with even more.

For anyone being around 18 to 25 reading this, I am not trying to be mean or sarcastic. I am trying to tell you that if you that if you can just try to save under $70 a month till your thirty, life is gonna be so much easier for you after 30 and especially after 65.

$70 bucks a month !! Thats all.

Anyone here above 30 want to chime in on this?