Correction or Crash?

Correction or Crash?

The difference between a correction and a crash is usually your portfolio.

 Was this week a correction or a crash?

It depends.

Do you know the general trend of your portfolio for the last five years?

If your portfolio has been sideways to down over that time period then this week was definitely a crash. But if your portfolio has been trending up for the past five years than today was a correction.

How do you turn a crash into a correction?

Simple. Start with the basics.

1)      If you own any stocks that have fallen more than 25% since May 1st of this year then it is time to say good bye to them. During the same time period silver has fallen 35% BUT it is up over 1,000% since the year 2000. Hold on to your silver (and gold) and if you do not own any silver or gold this may be a good time to buy your first round.

2)      Place stop losses on all of your other investments, from the May 1st high of this year, that have not yet fallen 25%.

3)      Look for strength. I noted today that stocks with higher dividends did not fall nearly as far or at all. For example, Bristol-Myers Squib (BMY) which pays a 4.3% dividend is up 1.5% this week as opposed to the S&P500 which fell 6.8% this week.

4)      Have a strategy that has a contingency plan for days like this. One of the strategies that I teach and follow is Market Probability. If you were following the Market Probability strategy then you would have been out of the market on September 1st. The market has fallen 7.1% since that day.

These are tough times. It helps to be part of a group that is following concrete strategies that are able to grow and protect your money in up or down markets. Having your money follow strategies like this will enable them to call this week a correction and not a crash.

It’s not too late to only have corrections in your future. Start now.

Together, we are growing and protecting your wealth,
RC Peck

PS – Now more than ever being part of a group that is thinking many steps ahead of the crowd is warranted. The simple fact is people who have lost money over the past decade are using tools that stopped working when Bill Clinton was president of the United States. Update your tools and thinking here.