Did something change with omnicron over the weekend? This is insanity.
Emotions.
Be patient. This is only the start. More to come especially in 2022.
You are seeing very weak money selling off high risk. This will create long term opportunities in strong large cap tech names as we have been talking about.
I see nothing wrong with a healthy 10% correction as that is normal and expected.....what happens is the “emotions” of retail investors really start to snowball it where it takes the entire market down....and that is when the real opportunities for long term investors reveals itself.
When was the last time this market had a real sale? March 2020. I don’t expect it to go that deep....no. But I do expect more selling pressures in 2022. Just a lot going on which we outlined right before Black Friday.
That is why we suggested to everyone here to build 20-30% cash back then....to be able to nibble into great names as they sell off for no good fundamental reason.
2018 the market fell over 28% peak to trough when the Fed was raising rates. They pivoted. I do not think that happens this time around.....the inflation number is too strong to continue this easy dovish monetary policy. The economy is very strong and I am not worried about a recession. Inflation is the real enemy along with supply chain issues and the lack of supply in many area’s of this economy. Then you have the unpredictable factors of Covid and elections and political noise. All of that makes for a cocktail of correction.
I would be very relaxed......keep maxing out your 401K’s and if you did not rebalance and build cash back when we talked about it.....do it now.
Have a list of stocks you absolutely want to own....and buy the dips and go long.
If you are mutual fund/ETF and investor....sit tight and wait for more capitulation because you are dependent on the fund managers discretion or index’s (ETF’s). Be patient.
2022 should be a positive year in the market.....but the ride will be a bumpy one.