The key to surviving a sell off is to lose the leverage. The first people to blowup during a sell off are those with highly leveraged positions where a sudden 2% down reversal in a 10+% loss . A 5% correction and its over. Even if they do sell, it isn't before incurring big leveraged losses. I have little trading leverage so all I have to do is just sit back, wait for the 10yr crazies to finish selling, and then add to my position when bearish sentiment seems to have peaked.
A. You don't have any leverage because you can't even afford a 19" monitor. B. You can't add because you don't have any money due to the fact that all your money is in the market. C. How old are you? D. If rates rise your stocks go down for a long time thus reducing any gains you could actually make. So if GOOG retraces to $450 your "gains" will be nothing and your "market crushing gains" that you somehow gloat about will turn into the nothing they already are in reality. E. Bonds are important turd.
StockTrdr3, don't take this the wrong way but you are dabbling in things you clearly do not understand (to equate the importance of a bubble in Shanghai with the breaking of a major technical level on the 10 year is astoundingly wrong) and have been lucky so far. Quit while you are ahead and then if you are interested start reading. When you have some idea of what you are doing you will still have your money to invest in a more savvy way.
As funny as this kid is with his "information", you do have to admit that he was been right (lucky) so far in sayng the market is going up. Darn luck, I hate it so much
Don't make him blow a load in his pants. ANYONE holding equity has been right. This guy just can't make the jump to smart by taking his $$$.
There is simply no compelling reason to sell from my analysis. We'll see what happens after this week. If the markets sell off on data, I'll probably buy the dip on fri or mon.
What is your analysis based on? The cost of Oreos that your mommy buys for you? If you friends can come over and play solitaire with you? Really, this analysis of yours needs further explanation.
The Fixed Income market is important. Without cheap capital, LBOs, mergers, stock-for-debt swaps all stop happening. With higher interest rates, there's something competing for investment dollars. If you can get 6 or 7% in coupons with no risk, why take 40%+ drawdowns with the hope of making a long-term 7% in the stock market? IMHO, inflation is the real cause of the duration shortening. The government can tinker with CPI numbers all they want (and point to "core CPI" and other such non-sensical numbers), but numbers like M3 and the GDP deflator do not lie. Fuel, Food are far more expensive than has been priced in, and are likely to get worse. (Just look at the global soy & corn markets for next year. Increased production and increased demand. At some point (soon), you can no longer increase both.) Take a look at 2/10 or 5/10 spreads to see what's going on behind the scenes. There's my analysis. What's yours?