Lessons From the Fall

After the market close on July 20, my gut was to sell all of my holdings. I decided to remain disciplined and hang in there. Earlier in the week I sold my speculative holdings for a very modest profit. Good thing too, I would have taken a bath in those stocks last week.

On Monday, July 23, the market was up on light volume. Could it be that was the last gasp of the bull market? Whether this was the beginning of a bear market or the start of the much anticipated 10%+ correction remains to be seen. As stated in the July 27 entry, I have been down 10 consecutive days, a personal record of the dubious kind.

At this point what is an investor to do? As an investor, one should strive to prevent losses. I could sell all at this point for a profit (albeit a much smaller profit than a month ago). Even with the horrible month of July, I am still up over 19% for the past 12 months and over 3% Year-To-Date.

I am staying in. I am not on margin (I would not recommend anyone using margin at this time of great uncertainty) so I am not in real danger of being wiped out. I am holding only 8 stocks. All 8 are in the Dow Industrials and all pay dividends. Two of my holdings (PFE & C) have yields of over 4.6% at current valuations. My strategy is to stay with my holdings at this time. I will likely add to all of my positions at "sale" prices at some point in the near future.