Sell-offs can be unsettling when you have money in the markets.
Especially when you see your investment portfolio — or the 401(k) plan you’ve been building for years — take a sudden dive.
The urge to stem the bleeding and salvage what you can is natural. However, sell-offs always offer excellent opportunities if you know where to look.
Consider the recent market sell-off across the top three stock indexes.
As you may know, it was triggered by Apple, one of the Magnificent Seven stocks, after Barclays downgraded the stock to an underweight rating.
It wasn’t the start to the year many investors had hoped for.
However, instead of panic selling, hiding out in cash, trading frantically, or making any of the many mistakes that hurt investors long-term… You can position yourself to start taking advantage of unique opportunities hiding in plain sight.
Here are a few things that have helped me along the way.
- Focus on quality and profitability across sectors. Historically, companies that suffer the most during sell-offs are those that don’t have any profits now but could potentially generate huge profits in the future. This explains why tech stocks took a severe beating during the blood bath in 2022.
- In other words, profitability during market turmoil is critical.
- Furthermore, it helps target good companiese linked to the real economy (like finance, industrials, energy, and so on). This approach can help you protect and grow your wealth during bouts of market turmoil.
One more thing:, realize that downturns don’t last forever.
The market may sometimes feel like it could go to zero, but history tells us that rebounds can return many portfolios to the black in just a few years.
In other words, selling everything and returning to the sidelines is unnecessary.
Suppose you have a well-researched and diversified portfolio; a good approach would be determining which positions are worth holding and which to sell.
For more insight on how to find unique trading opportunities during market sell-offs, feel free to join me in my trading room at 2 pm ET this Thursday.
Attendance is free, and I’m happy to answer all your questions.
Wishing you many blessings.
