The Dow Jones Industrial Average took a triple-digit nose dive Tuesday ahead of President Donald Trump’s State of the Union Address where many expect him to boast about the equity market rally. If recent history is any indicator, any market pullbacks may be received as a buying opportunity for equities and stock exchange traded funds.
The DJIA closed down around 363 points after falling over 400 points earlier in the day, marking the benchmark index’s worst day since August and its first two-day losing streak in over a month.
As investors grow wary of an aging bull market run and predict a drawdown to rein in a frothy market, investors should monitor market trends and potential buying opportunities. A broad market trend usually comes in two flavors: an uptrend in price of higher highs and higher lows, or a downtrend in price of lower highs and lower lows.
Here at ETF Trends, we adhere to a disciplined investment strategy as a way to enhance portfolio returns, diversify and reduce downside risk. Investors should stick to a plan and not let emotions take over. Once you start thinking with your gut, it can be hard to kick-start your logic. Even neutralizing emotions will serve the trader well in the investment process. Specifically, you need to know what to buy, when to buy and when to sell.