U.S stocks have been in a bull market now for the last 6 years. It seems as though a correction should not be coming out of left field for everyone.
Hopefully your discipline has led you to keep some powder dry (cash) and you are building a great watch list of companies you would like to own.
My suggestion is to watch companies that you KNOW will be around a couple of decades from now and love to reward their shareholders with dividends. Now the tough part is to wait.
While stocks are entering a new phase, gold is holding steady up $4 bucks. This is why folks need to have true diversification. The pro’s in the investment world often only talk about stock diversification. The say being diversified in all types of stocks will protect you.
But what if the entire market is going down? What if Europe and Asia are also going down? This is why having at least 10% of your wealth in precious metals is important. It is why also owning real estate is important. It’s even important to own bonds, even at the end of what must be a 30 year bull market.
The 10-year treasury is now back under a 2% yield. The Dow was down as much 1,000 points this morning, and is now hovering down around the 400 mark, this after being down around 500 points on Friday and 300 last Thursday. We will have to see where it ends up at the end of the day. This reminds me back 2008 when we had the Dow 777 drop.
My thinking goes that this correction will not nearly be as bad. This correction should be more expected than in 2008/2009, but there are no guarantees.
Raise cash and build that watch list!
Until next time.