The goal is to build a portfolio I can rely in
case of another market correction.
Not exact matches
Given the weakness in all
of the major indices, we still expect the
correction to continue, with at least a re-test
of the lows in the
case of most
of the benchmarks, although the
market might get very choppy before the Fed's meeting on Wednesday.
Some technical analysts suggest that the
market must close below 200 DMA to call this
correction over and historically it may be the
case as most
of the
corrections did close below 200 DMA but there were a few instances when this didn't happen.
The worst
case scenario is that you could be having a good year, but a big
market correction could wipe out all
of your paper gains from the first 11 months.
Leave yourself lots
of room for downside protection in
case a bear
market, or 10 %
correction, or adverse news for the underlying stock comes around before your stock (that was purchased with borrowed money) is called away.
The unfortunate truth is that bear
markets and
corrections occur with regularity — about once a year in the
case of a
correction, and about every three - and - a-half years in the
case of a bear
market.
In the
case of TRX, the drop is perhaps just a
market correction after its meteoric rise in value towards the end
of March.