Losing money in the financial markets is never good, but working hard to lose your shirt is much worse.
Emails I received in response to my column “Ask Arora: Did Trump reveal secrets to Russia? The impact on stocks, bonds and gold,” show that some investors are trying their best to make money, but they’re likely to end up holding the bag. It is only a matter of time.
Most of the incredulous comments were directed at using probabilities to make the following call: “It is simply not prudent to be complacent. If a downturn in the stock market occurs, many investors will be trying to get out of a narrow door at the same time. Selling everything is not called for at this time. Investors ought to consider not being fully invested, taking partial profits and holding a fair amount of cash and hedges. If the situation deteriorates, gold will be a good hedge.”
The purpose of this article is to show you how not to fall into this easy trap by using the only thing that consistently works in the markets. Let us start with the charts.
The charts
Please click here to see the annotated chart of S&P 500 ETF SPY, and here to see two tables on gold. For details, click on the link in the first paragraph. (This information has been subsequently updated for our subscribers, but for the sake of accuracy and making this a good learning moment, the links in this paragraph will take you to the same charts that were in the previously published column.)..Read more at MarketWatch
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