It’s no secret that the market and numerous exchange traded funds (ETFs) are meeting challenges lately. A market decline is never easy. Whenever a market correction occurs, it’s understandable to feel anxious about your portfolio’s performance. It leaves many investors feeling frustrated and helpless, wondering, "What do I do now?"
The best defense against a declining market is a strong sell discipline that is adhered to in good times and in bad. Our simple rules are to sell any ETF position that drops below its individual 200-day moving average or 8% off its most recent high. Having an objective investment strategy eases stress induced by poor market performance.
Most major indexes are still above their 200-day moving average, or trend line, for now. If it declines, it’s a sign the trends are changing, and we will follow them accordingly.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.