| The Penny Sleuth Features: Penny Stocks, Options and High-Growth Opportunities! |  |      | Editor’s Note: An actionable new penny stock watch list is getting sent out to Penny Momentum Trader readers this evening. To make sure you’re on the list, you’ll need to click here…
3 Important Steps That Could Save Your Portfolio
By Greg Guenthner
March 16, 2011
First it was unrest in the Middle East. Now it’s a natural disaster of unfathomable proportions in Japan. The world is throwing everything it can at the economy, and yesterday, stocks here in the U.S. tumbled under the pressure.
Before you begin thinking about where to go from here, it's important to take a critical look at the market at large. Things aren't pretty right now, but that doesn’t mean you should sit on your hands. Now is the time for a critical look at your portfolio. In short, it's time to get defensive. That’s why I’m detailing three steps you need to take to save your portfolio from a correcting stock market.
1. If you have a weak hand, now is the time to fold. Get your weak, speculative stocks off the table. You shouldn’t get bogged down in the stories of these stocks. If these speculative names are falling with the market and breaking support, sell to preserve your capital. Remember, selling now doesn’t mean that you can’t revisit the stock at a later date. Cash is a viable position, and sitting on the sidelines to see where your speculative picks end up when the dust settles wouldn’t be a bad move.
2. Check the market for recent misses. Look over your watch lists from the past few months. In these pages, you probably have the names of several potential trades that “got away” from you. Now, thanks to the correction, you might have the chance to buy one or more of these stocks at a more reasonable price.
This bit of advice comes with a caveat: Don’t rush a new trade while the market is correcting — and don’t buy stocks that are in the middle of a free-fall. Calling a bottom can be difficult — and dangerous. Instead, look for names that have corrected, are on or above support, and are showing signs of life.
3. The trend is still your friend. Here’s a helpful take on momentum versus trend. It comes from Jeff deGraaf, a highly respected technical analyst and alumnus of Lehman and Merrill Lynch. Recently, deGraaf detailed an important distinction between trend and momentum that I want to highlight for you.
When the market has momentum, deGraaf says, you need to participate. In other words, strong market movement should dictate your buying. On the other hand, deGraaf observes that trend is more flexible, allowing you the luxury to wait for good entry points.
Right now, it's obvious that momentum is not dictating a strong market move to the upside. But it's also important to remember that the primary trend is not yet broken. Your best bet is to disregard momentum trades in favor of trending stocks to add to your list of trade candidates.
Lately, the market has been opening a door one day, only to slam it shut the next. That's why you need to be extra careful. You don't want commissions eating your accounts because you get stopped out of trades every day. If you follow my three tips, you should be in a much better position to profit when the market finds support.
Sincerely,
Greg Guenthner
P.S.: This morning, I e-mailed my subscribers with the details of the latest issue of Penny Stock Fortunes. In those pages, I detail several buying opportunities as we prepare to “get defensive” during this market correction. Now, you have the chance to get these picks along with a full year of small-cap market insight for one extremely low price. Click here to be among the first to get the new issue…
3 Important Steps That Could Save Your Portfolio is featured at the Penny Sleuth.
|
| |  | | |  The Penny Sleuth, a free e-letter, offers independent news and commentary on small cap stocks, options and high growth opportunities. We sent this e-mail to KNUMASSCN@gmail.com because you or someone using your e-mail address subscribed to this service.
Are you having trouble receiving your Penny Sleuth? You can ensure its arrival in your mailbox by: Whitelisting Penny Sleuth.
To end your Penny Sleuth e-mail subscription, click: Unsubscribe.
The Penny Sleuth is your free and independent source for analysis, commentary and news on small cap stocks, options and high growth opportunities. At the Penny Sleuth, we give your our 100% independence pledge. That means that we never receive compensation to talk about any stocks we feature. Our editorial staff never owns a position in any of the stocks we mention at the time of publication. And we only recommend stocks that we come across in our own original research. Our pledge also means that we won't collaborate with companies who don't live up to our independence requirements. Nothing in this e-mail should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of a printed-only publication prior to following an initial recommendation. Any investments recommended in this letter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company. © 2011 Agora Financ ial, LLC. All Rights Reserved. Protected by copyright laws of the United States and international treaties. This newsletter may only be used pursuant to the subscription agreement and any reproduction, copying, or redistribution (electronic or otherwise, including on the World Wide Web), in whole or in part, is strictly prohibited without the express written permission of Agora Financial, LLC. 808 Saint Paul Street, Baltimore MD 21202.
| |
No comments:
Post a Comment