When to invest now?

(4 posts)

  1. jallenaz
    Member

    I had our money in mostly mutual funds until recently. The market started down and I set an 8% loss from the recent high as a sell point. Last week I ended up mostly out of the market by Friday night. Now I want to start with ETFs and trends. Most everything is above the 200 day moving average. They might not get that low, or they might go a lot lower. I'm trying to decide when I should get back into the market. Maybe when they get above the 50 day moving average? I tried that with one ETF and lost money. Looking for ideas. I think the market is going down in the not too distant future. Maybe I should just be patient. Keeping an eye out for ETFs that are under their 200 day average.

    Any ideas appreciated,

    Jim

    Posted 2 years ago #

  2. Donato
    Member

    Hi Jim . . .
    There are probably two schools of thought going on currently. The first is that this is a beginning of a new trend down. The second is that we will be continuing the trend up after this sell off.

    Since nobody knows the future, if you want to get into the market now, risk (money) management is the key to success. That is what you should study now.

    I guess there might be a third school of thought: That Fridays low and the high's in early January will define the next trading range.

    For me personally, I opened a couple of small long positons on Friday to test the waters. If I'm wrong, my stops will protect me.

    Good Luck

    Posted 2 years ago #

  3. jallenaz
    Member

    Thanks for the reply. I'm all for risk management now. I'm not too worried about missing out on a big up move soon. Not like March of last year when I had pulled out in a panic the end of 08. Got back in at just the right time, but only by good luck. Now I want to have a better plan. Looks like everything I'm looking at might get below their 200 ema. Some are already. So I can just wait for them to start to move up.

    Posted 2 years ago #

  4. Donato
    Member

    Hey Jim . . .
    I'm cool with being lucky!

    Pull up a chart of SPY. As long as the price stays above the low of last Friday (2-5-10), you can start making small bullish plays now.

    For a fun read, check out https://www.bsp-capital.com/documents/turtlerules.pdf

    Don't get hung up on all the calculations, they are for risk management in the futures market. But you can learn a lot from the book. Not just risk management, but a simple and cool method for entering a trade to catch a big move; you'll have to change the number since you'll be trading stocks or ETF's, but it's simplicity and ease of use (with proper risk management) makes it oh so cool.

    Good Luck

    Posted 2 years ago #

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