Let me suggest we all make a list of stocks we might buy for BIG gains after the coming recession/washout. This list should be ongoing... add a stock to your "follow" list when you run across one that looks like it might be promising. Then after the crash, we can post our favorites for all to see and benefit. I have a folder called Stock Watch with about 60 stocks in it... when I come across something I put it in there for future reference. When the big smash comes, I'll for sure include the pot stocks (which may be selling for pennies) and certainly FCX (Freport McMoran). In the 2008 bear market, Citibank got down to $.95. Are you serious??? Citibank? We're likely to see similar this time around too. Might be a year or more before it's time to buy the hoped-for "baggers", but need to prepare in advance.
sounds good. in the meantime what action can you take to benefit from declining prices while you wait?
Obvious effort is to short the right stocks, ETFs, put options... also to buy the inverse ETFs. Still lots of risk in this market, but by the time the smashola bottoms, nearly all of the risk will have been washed out. The safe play is to hold lots of cash and be patient for the decline. Of course it's important to "make a big score"... but it's MORE important to "not take a big loss(s)".
I'd advise against shorting outright. In inflationary environments, the inflation puts upward pressure on stocks even while the crash puts downward pressure. This leads to unpredictable results and naked shorting is quite dangerous for that. I'm terrible at bear markets, so I don't know what I would advise, but shorting per se less so. Maybe calls on ultra-short index etf's? I've had poor luck with VXX and UVXY, (used as hedges mainly, but no real benefit during the decline). I've done my research, too. Short term - a nimble trader can short and play the downside. But I like my trades a bit slower than that, personally.
All in the SP500 is going to be too broad to be effective as it could be. If many of us have "eyes on the market" (the market is too big for all of us to do a good job of "following everything")... and some of us come up with 2-5 stocks they think have big potential... then we can evaluate all that for ourselves and maybe do us all a great good. Personally, I'm a big fan of the pot stocks. Not at current prices, as weed is just a commodity with no pricing power. But as people like to "intoxicate themselves", the big pot stock companies are likely not going away, regardless of how cheap their stocks get. So... when they "throw the baby out with the bath water", BUY MARIJUANA STOCKS!!
Hello Scataphagos, I agree. If Apple goes to 52 week low, I am going ALL in with everything I have at the moment in spare cash, then continue to dollar cost average every two months forever.
If you believe and we we're in fact in a "bull market correction", that would be a constructive play. If we're really in a BIG BEAR market, you'd be too early and regret not saving your buying power for later.... just my $.02 Personally, I'm not onboard with those who pontificate, "the bear market is over". There are 2 ways for those people to be wrong.... (1) the decline since the first of the year is not a bear market at all, but rather a "correction on the way up".... (2) if we're really in a bear market, it has a LOT further to run. \ FWIW...
Just stick with what's moving. How far did Nasdaq, S&P and Dow futures move today? Ignore this if you don't short instruments.