Strategies to Counteract the Current Market Madness
by Charles Rotblut | March 09, 2020
Charles Rotblut recently spoke at the AAII Investor Conference 360. Video replays of all sessions are available for purchase. Go to www.aaii.com/investorconference for more details.
Investors woke up this week to markets fluctuating on news of the continuing COVID-19 (coronavirus) outbreak and Saudi Arabia lowering oil prices. How should the individual investor react?
AAII Journal editor Charles Rotblut discusses staying calm in the face of market adversity and sticking to your long-term investing plan.
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Discussion
Bruce Gagala from Illinois posted over 6 years ago:
Sound advice and good strategy to maintain funds for living expenses separate from the investment portion of one's portfolio. Allows one to avoid panic selling
Jay Miller from Texas posted over 6 years ago:
Thank you for this, Charles. A friend of mine is on the verge of selling all of his equity positions which are significant. He has set a strategy for himself of selling all his equities once the market falls 30% below its level on Dec 31, 2019. He's 50% allocated to equities and would have enough liquid assets to weather bad times for more than a year. But, his thinking is that he'd rather start again with a 30% loss than a 50% loss or complete wipe-out. Both his strategy and the one I'm more comfortable with of holding on rather than trying to determine the bottom of the market and nibbling back in have their respective sources of concern. Of course, holding on requires sufficient funds to weather the down times. I think I'll go take a walk in Nature now.
Gary from Florida posted over 6 years ago:
Regarding using the market correction to convert an IRA to a Roth, doesn't that mean one has to sell the ETFs, funds, whatever and re-buy them thus locking in the loss, or does the process just involve re-characterizing the IRA and paying taxes on that amount?
Dan from OH posted over 6 years ago:
William O Neil recommends one should consider adding to your mutual fund positions when the market indices are down 30 percent.
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