Wednesday, August 21, 2013

Staying Upbeat During a Correction

It's not easy to have faith in the positive nature of the stock market when things are crashing all around you.  The market is down around 5% from the high, and the Dow 30 has gone down 6 straight days.

But, take a little long term perspective.  If you had just come back from a two-month cruise and checked your $SPY position, you would find that it was actually UP four points from when you left.  So, as bad as this recent run is, overall the market is up quite a bit over this quarter and for the year.

The market may still drop, there's plenty of economic uncertainty.  But what's not uncertain is that companies continue to generate services and sell products at a profit, and eventually that profit will hit the companies' bottom line, and will eventually be reflected in stock prices.  Maybe not tomorrow, but over time.

So, calmly continue to buy quality companies.  Not with both fists.  Maybe with a finger or two.  Sell the jokers you bought because they were flying high, when they didn't have a good, profitable product.

Stay the course, just trim the speed.

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