As an investor you should get excited about a stock market correction. Moreover, it’s a time of great opportunity. A chance to pick up stocks at ridiculous bargains.
Also, Wall Street veterans strictly follow the proverb: “buy weakness and sell strength.“
And so should you.
In light of the current stock market correction what should you do?
For one thing, you should checkout the Ultimate Portfolio + page and review the stocks posted there. In particular you will find charts including technical and fundamental analysis.
The best piece of advice is to not panic! That is to say, have you ever made a wise decision when in a tizzy. Probably not.
Nevertheless, let’s take a moment and review the BIG PICTURE and see if we can get some perspective on the current stock market correction.
F/X
Not surprisingly the US dollar is on the rise. This is no surprise. It is common to to see the US dollar catch a bid during a correction. We’ve seen it a million times before.
However, will the US dollar resume it’s decline once the stock market correction is over? Obviously, the US dollar’s volatility will impact commodity prices going forward.
Bonds
Surely, by now you pay close attention to the 10 year US treasury yield. If not, please take the time to study this market. Without doubt this should be the first chart you look at everyday.
In light of rising interest rates investors need to take a step back. And that’s why we are in a stock market correction.
To be sure, the Federal Reserve has told us rates will remain low for an extended period of time. Well, why are rates spiking higher? Is the market losing confidence in the Federal Reserve?
In truth, we don’t know what’s going on. And that’s a problem. But one thing is for sure, interest rates had better back off or the stock market correction will get worse.
Stocks
Taking a look at the S&P 500 stock index I noted two mini corrections so far this year. One in late January and another right now. Contrarily, January’s correction occurred as interest rates were falling. But today’s correction is the opposite. An interesting dichotomy.
Consequently this suggests the current stock market correction has the potential for another leg lower. However, this assumes the Federal Reserve fails to gain control over interest rates. In contrast, if interest rates fail to spike further, the bull market in stocks is back on.
Conclusion
All things considered, a stock market correction ushers in buying opportunities. Skillful investors are patient and wait for their opportunities.
In any event, always be prepared for a correction. A healthy bull market is full of them. So be ready for when the happen, because the will. Guaranteed!
Are you looking for opportunities to buy stocks during this correction, then checkout my Ultimate Portfolio + page for ideas.
DISCLAIMER: Content provided in this article is for informational and entertainment purposes only. This article is not legal and/or investment advice. This article should not replace professional investment advice based upon your particular situation. Duties are not assumed, intended or created by this communication.
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