Have You Done with Taking Profits from Stocks Or is there More?

Lately you have been hearing news from the experts you have followed during the last recession or stock market crash period. But you should also look out for the optimists’ point of view. Now these experts are loudly saying that the recession is long and stock market rally for the last two has also been long and sharp in a short period of time. It is now time that market made a reversal. What should you do when these experts say like this?

First of all you should understand that these experts are not right all of the time. You start following an analyst or a market advisor when their statements fall inline with the market movements. This is natural for everyone. Except people who are too new to the market who fall for every advisor, every smart investor or trader learns to listen to experts whose talk matches with the market.

Though it is a good practice one should keep in mind that no expert can be right all of the time about the stock market. Market can behave independently and that is the beauty of it.

You should take their advices with discrimination. Generally there are two types of advisors at all times. Those who talk about crashes and suggest you to move to safer income streams and there are those who talk about bull markets and optimism suggesting you to invest more now. Naturally when there are two sides of a coin for the same stock market and same time period, it will be hard to decide which side to take.

My way of dealing with this kind of situation is to let the market decide its course and let me know that. That means I will watch the market and continue what I have been doing for the last few weeks or months. I will still follow recent trend. Of course I should be cautious now more than every because the market has shown the worst of its behaviour in the last year.

Meanwhile I will listen to experts and take on information that they have to offer. I do not just follow either side of experts easily. But I will consider their information and use that to match with the market movements on a daily, weekly and monthly basis.

Their information is more crucial than their suggestions. If you did not yet understand what I mean by information, this information is about news not related to the stock market but its listed companies and general economy. They speak about demand for products, joblessness rates, monetary policies, budget deficits and allocation, its consequences one economy etc.

What you can take from these snippets of information is that you can use your experience whatever little it may be along with your conscience that tells you how much weightage must be given to each of these information.

If the market continues to move in the same trend that means you will adjust the weight of the information that is supportive for the current movement of the market and also study more on that specific information. It may happen that market makes a sudden reversal and you will not get surprised or affected by this if you followed any updates on that specific information.

Similarly when market reverses direction you should start understanding the weight of the opposite information and consider studying in detail of that. It is very important to get updated with news. But you need not do this too much. There is always a simple way to get the most important information in a few word summary on the internet. Go for details only when circumstances demand and you have time for that.

In the present circumstances I haven’t seen any major shift in news or mindsets of the experts and stock market analysts. Hence I don’t see any reason for a sudden reversal though many experts like Marvin Clark, David Rosenberg started saying that. Some experts supporting opposite side of the market are always ready or cautious and keep telling the same thing that market had peaked by now.

Unless the market proves that by making a sudden jerk backwards and not being able set any more new highs it is time to reconsider our chips. Then start following these bear market experts.

The recession is long and the rally too was long. Though it is feels like the right time for a reversal, we are not the people who move the market. Let the market decide its course and adjust your movements accordingly!