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.
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.