Action in Global Stock Crisis 心动不如行动

Action in Global Stock Crisis

Market analysts usually like to predict the future. Before 1 month ago in bull market, some still predicted how high US stock and economy may surge. Now, of course predict how low it may drop to the bottom.

Some readers may be confused of so many future market directions, unsure which one to follow, ending up as an observer without taking any action, missing the boat eventually.

It is human nature hoping to buy at the lowest or sell at the highest point of stock market. However, it is not practical to follow these predictions before actions. Each of us need to have a strategy aligned with personality, may not need to be a long term investor, could be short term or mid term trader.

In general, long term investor only need to buy at price below the value with significant discount, no need to buy at the lowest (if got it, treat it as a bonus but not a must to have). An investor just need to define % discount acceptable to oneself, similar to a shopper going for shopping with sales, will trigger a buy when % discount is more than expectation.

For traders, one may add trend-following indicators on prices, waiting for reversal before entry (now is mostly for shorting), no problem if new prices are higher, a confirmation of new trend (eg bull to bear) but always follow SET plan: Stop Loss / Entry / Target Prices.

Action is more important after reasonable analysis (no need to be very precise, especially for longer term investing but overall direction must be correct). Press the button when signals aligned with own personality, not aligned with market analysts or mass market.

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