Decide Which Stocks You Want to Buy on the Sale
Let’s start with one thing: you cannot time the market. But that doesn’t mean you can’t do some kind of proactive planning before the market inevitably crashes again.
What I mean? Aside from, ahem, stocking your investment and retirement plan, and possibly converting a little more into cash, if you’re really worried, consider what stocks you would like to buy up during the “sale.” Those. when stock prices fall.
Here’s an example of some of the most popular stocks today after the financial crisis from The Motley Fool:
Naturally, we all wish we had the foresight to invest in Apple and Amazon back then, and you never know when prices will be lowest. But when you think now about companies you believe in and are willing to invest in over the long term, this could be a good buying strategy during the next market downturn. It sounds like a piece of advice to do in turbulent times not to get your money out, but to put in more, except that you are now strategically thinking about your stock wishlist.
Here are some tips for when to buy:
- When price reaches a price range you set (i.e. not a single price point, but a range that you set for yourself): According to Investopedia , “analyst reports are a good starting point, as are agreed price targets that are averages of all analysts’ opinions … These numbers are published on most financial websites. “
- Once you’ve done your homework and are used to your choice: Arming yourself with information about a company is the best way to decide if you think it will make a good investment. You can look at blue chips (like Coca-Cola or Wal-Mart) or tech companies that remain in place. Make sure you read the company’s annual report, news releases, take a look at its P / E ratio, and more, all of which are widely available online with a quick Google search. Nothing gives a 100% guarantee that you are doing well, but the more information you have, the better.
It is important to note here that the best way to amass wealth is to consistently invest over time in a diverse range of low-cost ETFs / mutual funds . So I certainly am not suggesting that you put together your entire investment plan to catch the market when it is at its lowest and only buy companies where you are confident you will be successful in order to become a millionaire and / or comfortably exit. on retire. It’s impossible. As The Motley Fool notes, ” In the long term, the stock market is an incredible wealth creator, no matter when you enter it .” (Underline them.) And whatever you do, you will need to back up your investments with a lot of diversification.
But if you have money to play with, or want to prioritize investing, start your research now and find out what you would buy and in what range.