Stock Market Crash

Are you ready for the next big stock market crash? For the conservative investor, resist speculation…since asset allocation programs don’t factor speculative prices (or price to value comparisons). Think hard about that for a moment. What is a crash anyway? It’s a price correction on an over-valued stock market.  

How would you invest, if the market was going to crash tomorrow? Would you be 100% cash? Would you be in bonds? Or would you wait for the crash and buy stocks at a low price?

For most investors, it’s easier to just buy and hold for the long-term. For stock brokers it’s easier to just give advice based on the old strategy of buy & hold, since a stock broker has to spend 80% of his or her time soliciting for new clients. But, let’s put those issues aside for a moment to consider if you were to buy and hold, and simply held your position through all the market cycles (both up & down). Your return would be around 9.6%. But if you consider, getting out of the market at the worst times and then ride the bull market up, your return would be around 20% (a buy and hold…then sell strategy). What would you want? Hopefully, the later of the two choices

Do not take the course of investing in single securities…when the sky is falling. Leave this type of investment approach to professional investors. If there are reams of data to support an opposite market direction, take your money and run! It’s not the return on your money that counts…it’s the return of your money that counts.

Investing is made up of an uncertain future, made by decisions with incomplete financial data to support investment decisions. For the conservative investor, it’s better to be out of the market when the market is simply un-decisive towards a bullish run.

So, if you believe the market has crashed, or will get worse…stay out of harms way! You’ll be thankful that you did.

Sincerely,

John Bagwell

The Truth About Financial Products.com

www.thetruthaboutfinancialproducts.com