How Low is Low? Investing Based on Emotion is a Great Way to Get Sucker-Punched by the Market!
That markets have shown some wide ranges in volatility lately. This type of volatility suggests tremendous confusion amoung investors. Remember that one or two up days does not make a bottom, or a new trend, so be patient before you throw your money back into something. It is nice to the see the Dow closed up 105 point at 11,079 while the NASDAQ closed higher by 34 to finish the day at 2,141. Advancers beat out decliners by almost 3:1 on both the NYSE and NASDAQ. Again, this not something to get excited about and throw your money at.
Investing based on emotion is a huge mistake that many amateurs often times make. Before you get all excited and think that you are going to "miss" the bottom, take a moment to really look at the charts and see if this is indeed the bottom. If the marekt and other worldly fundamentals still are not in place, then be wary. A good friend of mine, David Gordon, once quoted "how low is low?". The point David was trying to make was to not let the markets sucker you in when the market leaders are really taking a hit. In this case oil, metals and cyclicals have really been hammered lately. Patience my friends - don't get sucker punched trying to guess "how low is low".