daytrade diaries... october 22, page-74

Most of us realize the current market can't continue like this for ever & at some stage it will have a correction. The run from March to now has been brilliant. It is always wise to be prepared for such an event.
Taking action after the correction has occured is always to late.
Things we can do to prepare for a correction:
1. Review our portfolios & make honest assessments of how individual stocks could perform during such a correction.
2. Prune our current portfolio so it can withstand any correction. Remember buying back previously held stock just lowers your cost base & you can start the trade again.
3. Ensure we have built sufficient cash reserves to buy the bargains as they become available. Remember it is always easy to make money if the stock is bought at bargain basement prices.
4. Develop your own investment stategies to handle a corection.
5. Be prepared to make the tough calls on stocks & not be influenced by "free" or paid advisers on what to do, remember it is YOUR MONEY NOT THEIRS. By the way this includes myself & every other HC poster, remember we all make bad calls on situations. The more we understand fear & greed the better investors/traders we become in the long term.
Hope this post has put your thinking cap on.
Cheers
Buffett
PS No Investment advice given in this post, please do your own research.