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Time for your fall back plan?

Nov 20th, 2007 | By TheWild1 | Category: Financial Markets

As it is becoming quite evident, to me at least, that we have entered a new type of market. It is becoming increasingly harder to pick a winner then it was before. Eventually I’m sure the market will find its way back north, but for now do you have a fall back plan?

For almost a year now, investors in the stock market have been riding a wave of growth and fast profits; however, it was only a matter of time before things began to correct itself, and I think that time has come. Through the past year people with relatively no experience with the market could easily make great returns, but now its time to get back to good old hard work.

Dow 11-20-07

For everybody, their fall back plan is different. Some might allocate their capital in different stocks, others will just try to keep their holdings through the long-term, and there are those that will just stay away all together. My back up plan consists of the first two. As I have stated over the past couple of weeks, since this volatile market started, I have been using a more (at least for me) riskier approach to trading in the stock market, and, while it has worked out for me so far, there is only so much time it can work for.

My back up plan basically consists of holding just a few of my favorite stocks (each week it seems like I am having to narrow that list) and putting money into those “safe” stocks. These are stocks that generally keep its cool, but the price doesn’t move as quickly. Some examples, in my opinion, include: Altria, McDonald’s, Johnson and Johnson, Proctor and Gamble, and even Coco-cola (which I recommended a couple weeks ago - Potential Stock Buys).

So for the next couple of weeks or months I probably won’t make the same returns I have been seeing over the last year, but something is better then nothing, and lot of times that is the best way to approach conditions like these.

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4 comments
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  1. Hey Wild1,

    My fall back plan is basically to short the initial down move and then sit in cash. I think these corrections are exciting because of all the future leaders correcting, setting up for their next run.

  2. Thanks for the advice. Whats your opinion of Jim Cramer?

  3. - yeah lets hope the run comes sooner then later

    - Jim Cramer is ok for trading ideas, but I recommend doing your own research before you buy a stock of his

  4. Well I if you like risk I have article featuring warren buffet on my blog which tells you buying a certain stock even though there is a bear market. My winner stock picks would be Macdonald’s as you said ,Google it keeps going even though market conditions. Also have you heard Ric Edelman he discourages individuals to shy away from single stocks and invest in etfs but I still like some of your opinions so be sure to check my blog out.

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There are no certifications or licenses associated with The Wild Investor. Although all decisions and recommendations are made with the careful research, you should consider all the risks and your current financial situation before taking any actions.