A Prescription for Everyone!
An email newsletter that came across my desk:
Risk levels continue to rise in the stock market as investors remain unsure as to whether or not the Fed will lower interest rates at their meeting later this month. Investors would be well served to keep a portion of their portfolio in the safety of cash and/or short-term bonds until the market sorts itself out as the odds are increasing that the market will retest the lows set on August 16th. If that is the case how the market reacts at that time will dictate whether or not the volatility will continue or whether the up-trend will resume. During times such as these it is better to protect your portfolio than to risk significant losses. The first rule of investing is to avoid the big loss. It is far easier over time to regain lost ground if you miss an opportunity while the market is advancing than it is to dig yourself out of a hole if you take a big loss. Just ask any investor who bought tech stocks in 1999-2000. The tech heavy NASDAQ 8 years later still needs a 100% gain just to break even with the all-time high set in 2000. Protect your portfolio as much as possible until a lower risk buying opportunity presents itself.
The line that really caught my eye was “until the market sorts itself out.” That phrase puzzles me. What does it mean?
