Like many others, I expect the stock market to pull back soon. There has been a terrific stock market rally for the past couple months and the upward trend will likely pause soon. In addition, some sectors like small cap biotechs, retail and gold are already starting to decline.
For now, I expect the decline will be short and shallow. My challenge will be to make some purchases after the decline starts since the main fear is the market will fall significantly further. To overcome the challenge, I will focus on buying more in stock for positions that I have partly purchased or that I have sold at the top of the trading channel. That way, I will be increasing my stake at a lower price than if I had made the purchase all or once, or buying back a good stock at a lower price than when it was sold.
In addition, I may take the opporutunity to put funds in a managed account or to create an ETF portfolio if there is a significant correction.
For more on The Practice of Personal Finance, check back every Wednesday for a new segment.
This is not financial or investing advice. Please consult a professional advisor.
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