2022 BRN Discussion, page-4528

I have had a career trading markets professionally and I thought I'd share 35yrs of experience here to help those less experienced retail investors who I know are experiencing a broad range of emotions right now......

1. do not look back at missed opportunities in an emotional way......its pointless.....just remember and learn.
2. if you have done your homework and the investment thesis remains unchanged then take your emotions off the table and put them in a draw. Not everyone can do it but the more you can do it the more successfully you will be.
3. everyday in the market is a new day and its a matter of reading the mood and acting accordingly/appropriately
4. I like to think of each day as a "buy" day a "sell" day or a do nothing day....today is a buy day. Of course with extreme volatility it can change intraday.
5. technical charts do not predict the future but can be a guide to target entry and exit points when the market is range bound...use them judiciously.
6. the sellers today are those who entered for a short term trade and have no real understanding of the fundamentals plus the day traders who smell weakness and are trying to leverage it for their own ends. Think of it in terms of these panic/opportunistic sellers giving long term investors the opportunity to buy more cheaply.
7. Always leave room in your portfolio to buy more and average in....nobody has the ability to "pick a bottom" with 100% accuracy.
8. If you are trapped in a long position above current market levels....hold your nerve...I reiterate, today is a buy day not a sell day....average in or just wait for a sell day.....there will be a better time to sell than today.
9. We are currently facing general market volatility because the market is worried that the Fed will put on the brakes too hard to counter higher inflation.....its the usual sell the rumour and buy the fact IMHO. Everything is circular....if markets weaken too far the Fed will not tighten as hard. Everything is self correcting....time is your friend in markets.
10. Inflation has risen for a number of reasons which are outside the Fed's control......firstly Trumps trade war on China has led to a trend reversal in the globalisation of supply chains and the ensuing focus on bringing supply chains home is naturally inefficient and inflationary...its the reason global trade took off in the first place(as I said before everything is cyclical)....its about comparative advantage...economics 101. The main reason though inflation is higher is because so much demand has been brought forward because of the pandemic....again the Fed will not crush demand because of a pandemic that will end eventually and normal demand patterns will reestablish themselves. These are the reasons the Fed will move cautiously and NOT deliver a hammer blow to the markets which would be counter productive in the long term. Central banks lean into bubbles but move quickly to save jobs and confidence when required.


These are my trading thoughts and doctrines NOT financial advice......I know they work from experience but I'm sure some will think differently.....I hope this just helps somebody today..........good luck all!

DYOR