Steps for this week
I'm planning for good news and bad news. It's really tough to know if the Fed will raise rates and what the tone will be.
The good news will be that the market likes the Fed's moves. In which case we can expect a decent surge in prices. At the same time, we are leaving earnings season and that tends to be a period when prices soften. So I don't necessarily want to buy into a wave that will be crashing in a week or two.
The bad news will be a disappointed market. A lot of the recent market gains are driven by Fed rate expectations. Any disappointment would hit prices hard. That would be a good buying opportunity.
I would like to prepare in two ways.
1. Tight stops: a 5% STOP should be initiated on your stocks. If the market crashes, you can buy them back cheaper.
2. Focus on stocks with strength. Oil equipment and services still show strong upside. Telecom is finishing the consolidation and showing signs of life. Semiconductor stocks have been beaten down but continue to show strong growth. Additionally, Safeway and Aetna look interesting as plays that can weather any economic turbulence.
In essence, I am still in no hurry to buy. That may have meant an opportunity cost over the past two weeks. We may even miss a big jump tomorrow. Or we may have saved a lot of money by waiting out the market turbulence. Either way, there will be buying opportunities.
The good news will be that the market likes the Fed's moves. In which case we can expect a decent surge in prices. At the same time, we are leaving earnings season and that tends to be a period when prices soften. So I don't necessarily want to buy into a wave that will be crashing in a week or two.
The bad news will be a disappointed market. A lot of the recent market gains are driven by Fed rate expectations. Any disappointment would hit prices hard. That would be a good buying opportunity.
I would like to prepare in two ways.
1. Tight stops: a 5% STOP should be initiated on your stocks. If the market crashes, you can buy them back cheaper.
2. Focus on stocks with strength. Oil equipment and services still show strong upside. Telecom is finishing the consolidation and showing signs of life. Semiconductor stocks have been beaten down but continue to show strong growth. Additionally, Safeway and Aetna look interesting as plays that can weather any economic turbulence.
In essence, I am still in no hurry to buy. That may have meant an opportunity cost over the past two weeks. We may even miss a big jump tomorrow. Or we may have saved a lot of money by waiting out the market turbulence. Either way, there will be buying opportunities.
posted by Andrew at
7:38 AM
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