Take Advantage of the Stock Market Plunge

Take Advantage of the Stock Market Plunge
Take Advantage of the Stock Market Plunge

Yesterday, February 8, 2018, the DOW dropped so low that it began cruising towards correction. This had many traders wondering whether or not it was headed for a total crash. There are signs of an impending problem, but we’re not quite there yet. In the meantime, there’s no reason you can’t start taking advantage of our failing stock market right now. Here’s a few tips to get you started.

Key Facts

• Be patient. Many times, these setbacks are temporary, and others sell off their stocks only to discover they made a mistake. Look at company trends over a longer period of time rather than knee-jerk reacting to market fluctuations.

• Look for stocks that still behave better, even when they’re dropping. A 10 percent drop isn’t necessarily that troubling if a company’s stock went up by 20 percent in the last year. That means it’s still up by 10 percent overall.

• Investigate stocks that always drop with the market – but always bounce back even better afterward. Like people, some companies find ways to benefit from a failing market, and this can improve their strength later on down the road.

• Look to economists for guidance on decisions. Most are still predicting increases for the greater part of the next year; the current correction status is mostly a result of Trump’s tax reform promises. Stay the course when you can, especially if the long-term outlook is positive!

• When times are especially trying, buy in promising industries instead. Many economists are pointing to industrial, finance, healthcare, and robotics industries right now because they show so much overall growth. This includes certain overseas markets, like China’s e-commerce industry and Japan’s powerful robotics companies.

• Decide how much loss you can tolerate at any given time (loss per month, loss per year) well in advance of fluctuations. The concept, “know your limit, play within it,” normally applies to gambling, but investing is by its very nature risky. If you understand your limits, you’ll be less likely to jump on risky ventures or pull out when you shouldn’t.

• Make the plunge work for you. If you’ve been waiting to buy stocks, now is the time. Do some investigating to make sure the stock has a future, but follow the adage of “buy low, sell high” and you may find that this plunge works out in your favor.

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