Stock market volatility, directed mostly to the downside this year, has caught the attention of anyone with funds at risk. The obvious question on most people’s minds is whether to get out or to put more money in. Advice going both ways is readily available. Here are some such articles. Take them into account and make your own decision regarding whether this correction is an opportunity to buy or a signal to sell.
So says Monty Pelerin (economicnoise.com) in edited excerpts from his original article* entitled Stocks — Buying Opportunity or Run For the Hills
[The following is presented by Lorimer Wilson, editor of www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Pelerin goes on to say in further edited excerpts:
Cases can and are being made that this drop is a great buying opportunity. Most sell-side analysts cite any time as a good opportunity to buy. Likewise, there is another contingent, usually not dependent on Wall Street for their livelihood, claiming recent market activity portends the economic Armageddon that is inevitable. Their advice is to get money out of the markets while there is still time.
Sell-side analysts, basically anyone employed by a Wall Street firm, cannot be independent without jeopardizing their employment. These analysts and their firms only make money when people participate in markets. Honesty, at least when people should be wary of markets, conflicts with the way their family eats.
How about those independent of Wall Street? They can afford to be objective and honest in their assessments, although some may have political or other motives which affect objectivity. Independence, however, does not mean their forecasts are any better than others…
It is easy to find embarrassing predictions. Anyone who is in the prediction business can be ridiculed after the fact. It is a fool’s game, one that intelligent people are forced into. Entering it willingly is prima facie evidence of low intelligence.
Having said all that, you can be assured that I am not going to forecast whether you should be buying stocks with both hands or running for the hills.
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
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Two question to ask yourself:
1. Is your portfolio at risk, should their be a major market correction for any reason?
2. If it is, then why are you not adjusting your portfolio to reduce and/or eliminate that risk?