I've heard this question a lot lately. Unfortunately the answer is nowhere. Buying and holding is an extremely risky strategy right now and although eventually there will be historically low prices on certain stocks that will end up in retrospect looking like incredible values, I don't think the market has bottomed yet. People buying in right now trying to pick the bottom are getting their asses handed to them.
If you don't believe me, look at this chart for sector performance across weekly, monthly, and yearly time frames:
A sea of red in every industry in every sector. Not too many safe bets for buying and holding. (This chart can be reviewed in detail at Stockfetcher.com > click on the Sectors and Industries tab > view all Industries)
Read this article by Timothy Sykes about why he believes the bottom hasn't arrived yet in the market. I agree completely.
Unless you are day trading, the only way to make money right now is to short stocks. I would move any money in a 401k to a cash position.
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2 comments:
I'm with you on the trading as good and the overall market has more downside. If somebody is buying and holding in a retirement acct for more than 10 yrs out selling all your loosers right now and going to cash doesn't make sense. Atleast if your at all optimistic about the worlds prospects for a good economy. I think most healthcare stocks will do ok in the recession. I think hedging longs with a small short position in futures or options where the risk reward bc of the leverage is good. short etf's etc
haha yeah I'm with you on more trouble. It's hard for me not to be bearish bc of what I heard George Soros say and Buffett to. I've learned not to doubt Buffett on macro economics. Soros is darn smart to.
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