Waiting for the market to stabilize is not an investment strategy. Waiting for the market to bottom is not an investment strategy. Putting stop losses on your portfolio is not an investment strategy. No one can successfully time the market over the long run. The only viable strategy is to buy companies with strong balance sheets, lots of free cash flow and a history of rising dividends/share buybacks, which are trading at or below the price earnings multiple of the S&P 500. Buy quality when the market is headed down and buy more if it goes lower.
A stock should be sold only, when its price earnings multiples is above the S&P 500 multiple, if its balance sheet becomes impaired or its dividend stops growing or the share buybacks stop. Sell quality when the market goes up and sell more if it goes higher.
The market can make you feel like a genius one day, only to make you look stupid the next. Don’t let the market call you an idiot. The best time to invest is when you feel the worst.
