for those that are worried about investing in the current climate I would say keep a very discipline approach.
and think carefully about what you are investing in, I will list a few things that I look for.
- make sure the company is cheap compare to its peers, this will limit any down side risk
as even in a poor market good value is still good value regardless.
- try to avoid buying stocks near their 52 week highs, unless they are still significantly undervalued still and the FA remains extremely strong
- you must have a plan of attack when buying into a stock such as
# mental stop loss in place before you make the purchase
# how long you plan to hold on to these shares, it could be a certain SP is hit or after a catalyst announced
# know what the resistance levels will be as it could give a indication of when to sell your shares
# if it trades in a certain pattern maybe ranging from low 3 cents to high 3 cents on a pretty consistent basis over a few months, clearly would limit risk buying in the low 3 region if possible.
# decide if you don't have a mental stop loss if you will average down or hold or sell for a loss
-companies that have recently gone for a big run say up 100% will be under more pressure if the market turns bad, as investors will look to cash in their profits.
- perhaps have some money in gold companies as they provide a bit of a safe haven, does not mean have every stock in gold as its still wise to diversify into different markets.
- identify what is running hot and try to capitalise on it while its their imo as if you sit in a quite sector waiting for it to turn hot to maximise your earnings you will miss a stack of opportunities you could of made money in.
- another thing is the market does not know how much money you put in a stock, if the fundamental's are there it will perform the same regardless
- do not put more money than you are comfortable to lose in the market, be that on one stock or over a few different stocks, if you are having trouble sleeping at night over your stocks, you simply have way too much of our net worth invested in the market.
- do not rely on one stock to make you a fortune it does not matter if you think its a 100% certainty
there is no such thing.
- never get caught up in a running stock with out going thru your normal process of DD, otherwise this is what is known as emotional buying, it might pay off but most times you will lose out.
- never invest based on what a few promoting a stock say, it can paint a good picture but you must take that picture and find out the author what his other paintings are worth etc.
there is much more but I think that gives a nice overview of what to look for, don't be scared of a interesting market just be better prepared to tackle it I say.
(20min delay)