How to Buy Stocks, ETFs and Funds in a Much Needed Correction

How to Buy in a Much Needed Correction

By Andre Weisbrod

If you have been following my posts you know I have been expecting a correction for many weeks now. In my May 30 blog article (VIP members and clients only). As Bulls Go This is a Doozy! But Can it Continue? I showed that this bull market had gained significantly more in its first 1,060 days than the three previous bulls. We are 4.2 years into this bull and so far its strength has been surprising with the S&P 500 increasing more than 30% higher than the 1987-2000 and 2002-2008 bulls grew in their first 4.2 years. The early years of the 1974-1987 bull aren’t even close. In my June 4 Facebook and Twitter post I said, The action since the S&P 500 peak on May 21 looks very much like the beginnings of a correction.

As of today.

the S&P 500 at 1:40 PM stood at 1592.11, down 4.8% from its closing high on May 22. Its intraday low of 1577.70 is off 6.9% form its intraday high of 1687.18 on May 23.

Now I cannot predict with certainty just how low this market will go or even if this correction is already over. What I can say is this:

1. Modern bull markets had many 3.5%-5% drops (closing highs to closing lows) and quite a few that were over 7.5% along with a handful of 10% or greater retreats. The charts I look at for technical guidance indicate that there is a better then 50% probability this market has further to go in this correction.

2. There are many sectors and individual stocks that are down as much as 20% from their 2013 peaks. This is where we are currently bargain-hunting.

3. We are not day-traders. We look for longer term opportunities in stocks, ETFs and funds that we think have good intrinsic value, prospects for growth and good management. We are not afraid to be a bit contrary here. Stay tuned.

If you are serious about creating, managing and utilizing your wealth and want a seasoned professional on your side, call me today at 412-367-9076. If I am not available I my intent is to return your call within 48 hours.

(If you want access to more valuable content and alerts to our periodic posts, register to be come a FREE or a VIP Member today. Clients receive VIP membership as a free value-added service. We have some of the best original proprietary tools you can use to improve your finances. Such as our asset allocation tool that gives you currently interpreted risk/reward parameters for 10 asset categories. Or our tool to find out if and when you can afford to retire .)