Wednesday, April 01, 2015

Preparing for a Market Decline

"Buy when there's blood in the streets, even if the blood is your own." ~ Baron Rothschild

It is very hard for me to put additional funds in the stock market during a market decline.  Instead of buying, I become conservative and worry about how much my current investments have fallen.  By the time, the market recovers, I've missed my opportunity to buy stocks at a discount.

At this time, I've decided to prepare myself to buy into the next decline and build our core investments.  First,  I have designed  strategy using 4-6 commission free ETFs. Second, I have created a list of dividend paying stocks to buy in addition to the ETFs.  Third, I've identified cash funds that can be invested for 3-5 years without causing financial hardship if the investments decline.

I'll learn how much this preparation helps when the next stock market decline occurs.

For more on  The Practice of Personal Finance, check back Wednesdays for  a new segment.

This is not financial advice. Please consult a professional advisor.

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1 comment:

Ahkenaten Kor said...

I do the same thing, and hesitate for no reason. With Stop/Limit orders, making a trade in a down market is much safer than it used to be... even if it doesn't go through 100% of the time