Its time to change your thinking about this beaten-up stock
market and get excited about the tremendous long-term potential.
If you find the current market makes you feel like sticking your
head in the sand and you long for the "good old days" of the
roaring bull market you could be costing yourself a fortune.
In reality, 1999 should have been a time for a cautious and
skeptical participation because stock prices were simply too
high but instead the excitement ran high. It seemed like
everyone was playing the stock market and making a killing.
Those days are gone and instead many people are avoiding the
market when actually this stock market offers alot to get
excited about today. Isn't it exciting to acquire shares of
companies with solid growth potential for 10 cents on the
dollar? Well, that is where we are right now. Hundreds of
blue-chip stocks are beaten down to multi-year lows and
sentiment is as extremely negative as it once was positive. This
is the time to look for investments that could pay off
incredibly 10 or 15 years from now.
Don't focus on current market conditions at the expense of
long-term potential. We should have been incredulous about stock
prices in the late '90s, and we should be excited about the
opportunities right now.
Almost everyone who owns stocks has been hammered these past two
years but that is yesterday's news. There is no good that will
come out of dwelling on the past. There are three things you
need to do right now.
#1. Shake off any bad feelings you have about the stock market.
The most important thing you can do is not to get depressed by
fallen investments and the stock market decline. If you do,
youmay miss long-term opportunities that are unfolding today for
both your new investment capital and your holdings. Part of your
new thinking will be to understand that the market is a marathon
although for a while it became a sprint. Forget about the gold
rush mentality.
#2. Honestly review the stocks and mutual funds you are holding.
You should only continue to hold stocks that you really believe
have long-term potential and only if you don't believe your
money could do better elsewhere. You have to check your ego at
the door and sell those stocks that are bogging you down
financially and mentally. So what you made a mistake, don't
compound it!
#3. Rebuild your portfolio for the future. Thinking
optimistically about the future of the stock market requires
some imagination these days, but it's what you need to do if
you're managing your money responsibly. Now may be a good time
to invest with added determination. We aren't saying add to your
current positions or averaging down. Instead understand that
fundamentals and potential play an equal role. The key may not
be to focus on the market at large but individual issues. Half
of the stocks on the NYSE are up this year. It isn't about what
stock is hot today, it's about which companies can grow their
businesses and create profits for shareholders.
This is not the time to retreat and lick your wounds, it is the
time to lay the foundation and rebuild. Depending on how long
you have until retirement this may be your golden opportunity to
build a dream portfolio.
Be smart in your investment strategy and think positively about
where we might be down the road. History teaches us days like
these are full of promise for the future.
About the author:
Since 1991, all Street Strategies has successfully provided
timely and effective equity advice to institutional money
managers, retail brokers and individual investors of all types.
Wall Street Strategies provides research online, including
enhanced services and online communication tailored to today’s
fast-moving markets. Visit http://www.wstreet.com to sign up for
free daily stock market commentary.
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