Your cost basis means nothing. Your YTD losses are irrelevant. If you’re having problems trading the market, go to cash. I’ve been investing since I was 10, and even I am having problems gauging the price action. Reason being: I’ve been programmed into believing the news to be irrelevant when it comes to stocks. For a decade, the Fed and the helping hand of the government have made sure stocks steadily increased in value. Now, all of a sudden, we’re in a spot where the Fed is tightening, while also REDUCING THE BALANCE SHEET by $80b per mo, and also dealing with the specter of a trade war and a slowing economy.
If you take that into consideration, and then look at the $3 trillion in BBB rated debt and $10 trillion in overall corporate debt, one starts to believe 2008 can happen again. But I know thinking that is my own mortality speaking to me, so I don’t believe it all the way. In other words, it might all be true and it might lead to a massive downturn — but it doesn’t have to happen now. Why not 2 months from now, or even 2 years, maybe 20. Nothing is etched in stone, which is why trading small or not trading at all is important during times of confusion.
The small caps are a key tell here. It looks like it topped out in this little range and might be heading back to fresh lows, in spite of what futures are saying this morning.
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