STAY OUT OF THE MARKET!

Today's Market
Dr Invest

I know you have been following my blog and wondering if such a dramatic drop in the market today, caused my stocks to sell. Here is the remarkable part, FDO (Family Dollar) actually grew in value today. Remember the phrase, "IRRATIONAL MARKET". FDO had been declining ever since I purchased it. It is "irrational" that when the market falls 300 points, only rising a little at the end of the day, that FDO gains .85% .  My emotions would have moved me to sell FDO after the first week.

All of the stocks that I purchased have remarkable fundamentals and should have grown 12 to 15% in a normal market. DLTR (Dollar Store) declined only .36% finishing the day with my loss of 4.50%. CATM (Cardtronics ATM) declined a whopping 5.05% today, but because it had shown a profit, my day ended with a loss of only 1.69%.

The reason you develop TRADING RULES is so you disengage your emotion. Experience teaches you that a 6 or 8% loss can EASILY be regained. Take your loss and come back another day when the market is better. When I entered the market, I KNEW THAT IT WAS VOLATILE. I didn't invest my total nest egg into the market, only enough to make a small profit, if I reached the 6% goal before the end of the year. Even if my stocks sell at a 6% loss, I know that I am not going to loose a lot of money.

If the market is destined to collapse, falling 30 to 40%, I'll re-enter the market when it bounces off the bottom. Better yet, I'll use a reverse ETF and catch a little profit on the way down. But always, I will use the same TRADING RULES to protect my investment.

Today was BAD. STAY OUT OF THE MARKET! I am amazed that I survived the day. Professional investors want to "run for the doors", but they must show their clients why they are paying for a broker. They have to stay in the market, even in the face of bad news with BLACK FRIDAY nearing. I believe that institutional traders saw a buying opportunity today to pick up the "dollar stores" and gain a post Black Friday bounce.

Trading requires experience, understanding, and favor from someone greater than you. That is why in times like these, I find PRAYER a positive comrade at the trading table.

(Note: The above article is soley for entertainment purposes and not to be used to make financial decisions of any kind.)