The market is up a little right now. That may or may not stick for the rest of the day but I continue to think things are ok for right now.
One of the perks of writing for the Real Money is free access to the other articles on the site. It seems like there is a lot of negative sentiment out there right now which is interesting.
I think this ties in with what I have been saying for a few days now (mostly in response to reader questions) about getting defensive because things should be getting worse.
A lot of people (pros and do-it-yourselfers) devote a lot of time to trying to successfully trade every short term trend. I do believe that certain people can get more right than wrong (and you don't need to be a pro). Most people probably should not be worried about the short term action.
I wouldn't suggest not having opinions, as a function of keeping tabs on what is happening, but I have to think if I tried to manage around short term issues I would be late to a lot of parties, have inferior numbers and cause my clients to pay a lot more commissions (we do not participate in commission revenue, that goes to Schwab).
Depending on what you read, it is easy to get caught up in trading more than is ideal. This may be cause to revisit your plan and what it is you are really trying to do and what you an tolerate if you are wrong.
When a trade needs to be done, do it and don't look back. But how many people do you know who need to try to game Broadcom's quarter to meet their financial goals?
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4 comments:
As an investor it is not clear how I can become defensive. My portfolio, such as it is, was remained largely the same for about five years now. At the present time I am very slowly getting out of low or no dividend stocks and getting into high dividend paying stocks or preferred stocks. I am 61 now and it seems the prudent thing to do. The question how does one become defensive or for that matter attacking though aggressive would be the better word.
Bernie,
good question, I will post about this later today or tomorrow.
For anyone who is impatient, you should be able to find more about this in the archives of this site.
I love lots of negative sentiment. It convinces me that we are not at the top of a market. At market tops, people believe the good times will keep on rolling, correct?
a basic tenet of contrarian thinking would say that when sentiment is high a selloff is coming and when it is low that is the time to buy.
its not always right.
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