Plan For Trading Opportunity During The Corona-Virus Pandemic
The fear and uncertainty surrounding the Corona-Virus pandemic has got the stock market jumping around like a ball on a roulette wheel. Where will it stop? Nobody knows…but you CAN PLAN for trading opportunity during these volatile times.
Now the stock market has been what I would call extremely over extended for quite some time now and a lot of people including myself have been waiting for a substantial market crash for years. In fact I thought the market was due for a crash in 2016 and I pulled a substantial amount of money out of my long stock portfolio when SPX was at 2050. At first it seemed as though I was right, the market did go down but it didn’t go down nearly as much as I had expected so when it took off again, I was sitting on all this cash, and the market is higher than it was than when I exited.
No problem, it’ll come back down, I’ll just wait. Well 4 years later it is up 2300 points and I’m still waiting. In the meantime I missed out on 50% growth with that money. Now I did have opportunities to put that money back in when we had the big down move in early 2018. We had the even bigger down move in late 2018 and now it looks like an even bigger down move this time.
This is a time to pause and ask yourself…Where am I going to put my money? Should I spend the rest of my life in cash? What is my plan?
There are trading opportunities while we are going through this Corona-Virus pandemic. Though to find them it will require the proper mindset, expertise, and planning to take advantage of them while you are waiting for the market to settle down into a new normal range. But while you are waiting, don’t necessarily be waiting in cash. You could miss some big opportunities.
So I encourage you to carefully observe the market to decide where opportunity is in the market place and create a reasonable trading plan with a focus on your risk tolerance. This could be that once in a lifetime opportunity! No one ever knows when it is coming!