Thursday, August 03, 2006

What to do in a wobbly market?

Do I get in? Do I get out? What does it all mean?

My investment books draw a big fat blank, are are mostly about making money when it's possible to spot a definite direction in prices. Right now though, they are just wobbling around. Can't sell short, no point in buying! What's there to be done?

One strategy is to hold and build up cash reserves. Another is to get out and get bank interest rates until an opportunity presents itself. It somewhat depends on how much is invested -- for small somes, too much trading will eat away at profits, so you need to be a bit more careful about executing a trade. If a trade is 5% of your stake, then you are in the game for Big Moves.

With this kind of trading, there are two options -- buy low and hold for a long time, or buy low and sell high. The trick is not to buy low and sell lower!

So, not many blog posts, since not many ideas.

Cheers,
-MP

1 Comments:

Anonymous Bethany said...

When times are bad and it would be detrimental to sell, I am for holding for a long time until the market stabilizes. Usually it does not unless your stocks are totally poor.

8/25/2006 11:08:00 AM  

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