Currently, there is lots of volatility in the stock market. Earnings beats, earnings miss, disappointing forward guidance, ceasefire ending, ceasefire extended, President Trump TACO, ceasefire broken, stocks go up, then down, then up again. What's an investor to do?
The approach I used to follow was to react to the volatility. Sometimes it was sell; other times it was buy the dip. Usually, this resulted in a whipsaw effect, sharply up, sharply down and a roller coaster. When the stock went up quickly, I would sell with small gains of 5-15% and watch the stock go up much further. When it went down, I would hold hoping to get back to even to sell and exit the position. I would sell the one's that went above breakeven, but, unfortunately, there were ones that took forever, or never, to recover.
My new strategy now is hodl through the volatility, since I'm no longer depending exclusively on stock gains for our retirement income. Hodling has significantly reduced my anxiety of owning stocks, since capital gains are no longer the main source of retirement income. Thus, I am more comfortable hodling though the corrections that inevitably happen. Of course, the real test will be if I hodl through a bear market, which has not happened since I started this investment strategy.
This is not financial, stock investment nor investment strategy advice. Please consult a professional advisor.
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