(02-25-2020, 05:57 PM)The Real Marty Wrote:

(02-25-2020, 05:09 PM)jagibelieve Wrote: This is looking like a good buy opportunity for some sectors.  While I normally like the technology sector I would stay out right now as far as new buys.  For now I am still holding, but I have stop losses put in with my brokerage.  I would stay FAR away from anything related to travel.  Energy and materials might yield some decent gains as well as healthcare.  It's too late to jump into treasuries (bonds) right now if you didn't already have a portion of your portfolio in them.

The major drop that we have seen over the last 2 days was pretty much needed and should reach the bottom soon.  I still predict a move to the upside by the end of the week, though there is no way we come back to where we were last Friday.

Remember the "flash crash?"  May 6, 2010.  A lot of people had stop loss orders and had their stock sold automatically.  Some of them even wound up automatically selling at a price below their stop loss order, because when the order to sell was initiated, there were not enough buy orders at that price to get the stock sold.  Then at the end of the day, the market was back where it started.  Except that some people had lost a lot of money because of stop loss orders.

 I got "kicked out" yesterday on pretty much all of my positions (for the most part) but still took some profits.  I am going to wait on the sidelines with cash at least into next week.  I still hold small positions in some sectors/index ETF's which I am going to leave alone.  What I have left in should make it back to pre-correction levels somewhere around the end of Q2 (my prediction).  I didn't "lose" a whole lot since I have been long on my investments, but I could have done better had I cut my losses sooner.

I would caution against any buying or selling tomorrow (Friday) since there is un-certainty going into a weekend.  I would wait to see what the market does on Monday before I considered getting back in.  Depending on how the market moves I might consider a position in the financial sector as well as energy.  Both in my opinion could do well after this correction.  Of course, consumer staples would be a "safe" sector to buy, but won't yield very high returns.  Depending on how the market recovers, I will eventually get back into the tech sector.  My reasoning is that the 10 year treasury yield is very low which means interest rates will remain low or go even lower.

One thing that I'm looking at is oil is down quite a bit and my dip down a bit lower.  Since China and Italy (perhaps other countries) are doing the "quarantine at home" thing the demand for oil has dropped but will eventually trend back up.

The other thing that I'm looking at is REIT's  since interest rates are so low right now and there is a high demand for housing.  This should move up as well as the financial sector with rates being so low.  People are going to borrow more money.

I would stay away from the consumer discretionary sector since this sector has a lot of travel related stocks.  Anyone that thinks that buying stock in a cruise line, hotel chain or airline right now is a good opportunity isn't very smart (investment wise)... just my opinion.  It also is a group which contains a lot of retail stuff that is going to be impacted by this correction (think toys, clothing, gaming consoles, etc.).

I guess my point is, look to the future not the present.  Think long term (at least over a year and more so 5 years) rather than short term (within 6 months or a year).  Sure certain stocks will spike up in the short term, but if that's what you're playing you aren't "investing" you are pretty much "trading".  Big difference.

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