The markets and some exchange traded funds (ETFs) have fallen to such low levels, that many an investor is thinking about doing some bottom fishing. But where can the opportunities be located?
Here are a few ways to find them:
- Look for companies with strong cash balances on their balance sheet and avoid sectors that could potentially be heavily taxes by a populist president, states Matt Stiles of Stockhouse.
- Don’t try to find the bottom, it won’t work because it won’t be identified as the bottom until months or years after the fact. Instead, focus on trends and see what’s starting to go up, not what’s heading south.
- Focus on sectors that are not heavily affected by the credit cruch and changes in consumer confidence.
- Establish a strategy and stick with it.
- Use our ETF Analyzer. We watch the trendlines to determine where in the markets we are when the time comes, and equally as important, how long we’re there. When you’re on the analyzer, you can sort by 50-day and 200-day moving average and find out where the trends are yourself.
Remember that no one is a fortune teller or mind reader. Educate yourself, don’t overextend yourself and invest as your risk appetite allows before entering or exiting the market. Additionally, keep in mind that some of the biggest winners in history defied what common thought and practice was.
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.