In order to protect the portfolios and exit the market(s), everyone need to analyze some trends which act as signals, before the huge or sharp corrections. Specially, when corrections are in full swing, it always makes sense to review the big picture. Below are some of the concepts but don't mistake these as the "only" concepts or way to make portfolio decisions, but they do serve as a big picture framework to help make better calls during corrections.
Moving average crossovers (Fig 1 and 2 - above) can help us monitor possible changes in mass psychology. The S&P 500 index 50D and 200D exponential moving average recently crossed its 16-month simple moving average (MA or SMA). Since late 1994, this cross has coincided with changes in the long-term primary trend.
The recent cross adds to the evidence backing a sustainable change in trend rather than a shorter-term head fake. The crossover has taken the markets to new highs again, shocking the people.
The whole point is to watch when 50D MA crosses 200D MA towards north. THIS IS BULLISH SIGNAL.
Buy-and-Hold is Still Alive
The recent cross adds to the evidence backing a sustainable change in trend rather than a shorter-term head fake. The crossover has taken the markets to new highs again, shocking the people.
The whole point is to watch when 50D MA crosses 200D MA towards north. THIS IS BULLISH SIGNAL.
Buy-and-Hold is Still Alive
In the below graph you can see that the actual market line is deleted in order to to show how patience plays in investing. The displayed line is the 200D MA.
Just imagine the amount of wealth you could have create had you invested at the bottom and held till today.
Don't worry, you haven't missed the buy!! There are opportunities even at this level, waiting for you. Just that you need to work hard to search for those hidden gems.
So, always take long view of the market and delete the word PANIC from your dictionary.
Buy-and-Hold is still alive (Warren Buffet) .
Happy Investing!!
No comments:
Post a Comment