Someone asked me today if I saw the market drop as a buying opportunity.
Nobody really knows do they. Wish I had a crystal ball - but I don't - nor do the talking heads on TV.
Here's my PERSONAL view --
#1 - I was in the hospital today (Mayo Clinic) getting another procedure done so wasn't around to see what was going on.
#2 - I raised a pile of cash a week ago. I had sold all the high fliers I'd been buying (because they've been the only thing truly working for months now) - I'm talking about Salesforce (CRM) - Splunk (SPLK) - Alibaba (BABA) - Boeing (BA) - Nucor (NUE) - and I sold most of my Amazon (AMZN) and kept 200 shares that I have an average cost of under $1,000 a share.
#3 - Why? Because we have a whacko political scene (don't take this as an invite to discuss politics or as my view on politics - it's not) - we have the tariff talks (now action) - we have rising interest rates and I wanted to be ahead of a surprise FED move - and mostly because the market has acted as if it was looking for ANY reason to sell vs buy.
This is INVESTING 102 -- it's not a thread called "trader talk" - I don't discuss what I'm doing, or not doing, personally unless it's used as an example here. I get many trades wrong - I get a lot right.... and what I'm doing is not what someone else should be doing.
+++++++++ HERE'S THE REASON I'M POSTING TODAY +++++++++++
I want to remind you -- as INVESTORS -- as share prices come down --- the DIVIDEND YIELD goes up as a percentage. Stocks are just like BONDS - bond prices fall the yield rises. Bond / share prices rise - the percentage of yield falls.
So ---------- we are in a rising rate market - yet share prices have gone thru the roof -- making YIELDS hard to find. As the market sells off --- all of a sudden some stock you'd like to have invested in - but felt the yield was too low and the price too high --- HEY!!! That bad boy might be falling right in your lap!
Don't RUN from the market during selloffs --- rather --- keep some powder dry -- don't rush in and buy everything you ever wanted. WAIT to see what happens -- chip away at what you've been watching/waiting to buy because we don't know if the market goes right back up - or we get a downturn that lasts for months (we are heading in to summer in a couple months - Sell in May and Go away) and add up all the other pressures or headwinds the market can run into...
Remember your timeline ----- those who ran to sell at losses back in '08 and '09 and then watched as the market roared right back with HUGE gains (they sold too soon and at the bottom -- then waited to be absolutely sure the market wasn't going to bite them again - and thus bought at the top - or after the market had run 25 or 40%). If you have 10 or 20 years -- remember that. If you put money in the market that you planned to buy a house with next week --- yeah --- well that was just dumb to begin with.
As "market" rates rise -- stocks fall to make their rates attractive. Nobody is going to buy an "expensive" stock that pays 2% dividend -- when they could get 3% interest in something else --- so it's a natural phenomenon that money moves around to find the yield that's attractive. It's the way money works -- it's always worked the same -- it will never change. Recognize it - know it - understand it.
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