Making money in the stock market is easy sometimes and sometimes it is just plain work. For those invested in mutual funds, do you realize every stock mutual fund with the exception of one has lost money in 2008? It is not an easy market to trade. Now if professional money managers are having a hard time what can it be like for individual investors or beginner investors ? So how do we approach the market in times where the bears have entrenched themselves for the long haul?
First off beware of days where the market rallies. Changing the direction of this market will take more than a day or two of positive gains. A novice can look at a stock chart right now and spot a trend. Trust what your eyes see. In her Weekly Stock Market Updates Becky Smith accurately predicted lower lows recently, and we may be headed lower.
The Sidelines Is Not A Bad Place to Be
There are times when holding cash is a good thing. Consider at least for now paper trading stocks. This is a great opportunity for you to hone your trading skills. Stocks that reach new lows more often that not go lower and trying to find a bottom on individual stocks can prove costly.
Watch The News
This market is being driven by news. Look at what happened to the market late Friday when word leaked out of a new cabinet member for President Elect Obama. His likely choice for Treasury secretary, Timothy Geithner rallied the market on that news. Will that be a sustained rally?
Patience, Patience and More Patience
This market will call for investors to be patient beyond what has been normal. The markets will turn around. They always do. However, beware of misleading signals. In the end there will buying opportunities. Watch what the institutions do and follow their lead. It is a time for bears , but the bulls will reappear.