Its time to change your thinking about this beaten-up stock market and get excited about the tremendous long-term potential. If you find the current market makes you feel like sticking your head in the sand and you long for the "good old days" of the roaring bull market you could be costing yourself a fortune.
In reality, 1999 should have been a time for a cautious and skeptical participation because stock prices were simply too high but instead the excitement ran high. It seemed like everyone was playing the stock market and making a killing.
Those days are gone and instead many people are avoiding the market when actually this stock market offers alot to get excited about today. Isn't it exciting to acquire shares of companies with solid growth potential for 10 cents on the dollar? Well, that is where we are right now. Hundreds of blue-chip stocks are beaten down to multi-year lows and sentiment is as extremely negative as it once was positive. This is the time to look for investments that could pay off incredibly 10 or 15 years from now.
Don't focus on current market conditions at the expense of long-term potential. We should have been incredulous about stock prices in the late '90s, and we should be excited about the opportunities right now.
Almost everyone who owns stocks has been hammered these past two years but that is yesterday's news. There is no good that will come out of dwelling on the past. There are three things you need to do right now.
#1. Shake off any bad feelings you have about the stock market. The most important thing you can do is not to get depressed by fallen investments and the stock market decline. If you do, youmay miss long-term opportunities that are unfolding today for both your new investment capital and your holdings. Part of your new thinking will be to understand that the market is a marathon although for a while it became a sprint. Forget about the gold rush mentality.
#2. Honestly review the stocks and mutual funds you are holding. You should only continue to hold stocks that you really believe have long-term potential and only if you don't believe your money could do better elsewhere. You have to check your ego at the door and sell those stocks that are bogging you down financially and mentally. So what you made a mistake, don't compound it!
#3. Rebuild your portfolio for the future. Thinking optimistically about the future of the stock market requires some imagination these days, but it's what you need to do if you're managing your money responsibly. Now may be a good time to invest with added determination. We aren't saying add to your current positions or averaging down. Instead understand that fundamentals and potential play an equal role. The key may not be to focus on the market at large but individual issues. Half of the stocks on the NYSE are up this year. It isn't about what stock is hot today, it's about which companies can grow their businesses and create profits for shareholders.
This is not the time to retreat and lick your wounds, it is the time to lay the foundation and rebuild. Depending on how long you have until retirement this may be your golden opportunity to build a dream portfolio.
Be smart in your investment strategy and think positively about where we might be down the road. History teaches us days like these are full of promise for the future.
Since 1991, all Street Strategies has successfully provided timely and effective equity advice to institutional money managers, retail brokers and individual investors of all types. Wall Street Strategies provides research online, including enhanced services and online communication tailored to today’s fast-moving markets. Visit http://www.wstreet.com to sign up for free daily stock market commentary.
