Stock Market Down in February, Just Like January 2022 – by James R. Wigen, Portfolio Manager, Independent Financial Management

In the past couple weeks we have heard earnings announcements from large, mid and small cap companies, results from those announcements all seem to cause their stocks to react the same, DOWN.  Some will say stocks were still to high when those companies reported, some will say the market decline is from Russia – Ukraine crisis, and some will say stocks are down because of uncertainty from Federal Reserve rate increases.

Know one really knows exactly why the market has declined so quickly, most likely the reason is because of all three of the reasons I listed.  When the market reacts like this, it generally does not mean it is time to buy more stocks, however, based on the revenue growth some companies have reported, panic selling would not be the right strategy either.

Action to take, buy very small amounts of shares from stocks you really like and plan to hold over the next few years or buy shares you plan on selling when the market abruptly jumps higher.  Right now many short sellers are piling into stocks causing them to decrease, and very soon they will cover those short positions, causing the market to jump higher.  We saw this play out earlier this week when it was reported some Russian troops were pulling back from the Ukraine border, causing the market to jump higher, that news turned out to be wrong, and down the markets go again.

This type of market makes us professionals go crazy, however, the reason you invest in the first place is to make money over time, not over a couple days or weeks.  As long as the stocks you own continue to have strong growth, stay with them or add to the position you already own.  Certain stocks recently have dropped 20% causing panic, then when the market races higher, many of those same stocks increase 10-20%, which is why you don’t time the market.  Individual investors can’t properly time the market, nor can we professionals.

Best advice, ignore the noise of the market as long as the companies you own continue to have strong underline growth.  This type of market is great for Selling Covered Call Options which have short-term expiration dates, as a way to earn income off stocks you already own.  Many stocks now have Options which expire weekly, if you want to learn more, please contact me, 1-855-546-9443.

 

James CPM® designation was supplied by Global Academy of Finance and Management or GAFM®

Investing involves serious risks and past performance is no guarantee of future performance or success.  This is not an offer to buy or sell securities and nothing contained herein should be interpreted as a recommendation regarding any investment or investment strategy.  Before making any decision to invest, first read the relevant disclosures and important information provided to you.

Please take the proper risk for your current situation and get the advice from a financial professional who clearly understands your current & future goals and objectives.

Investments are NOT FDIC INSURED * MAY LOSE VALUE * NO BANK GUARANTEE   

All opinions expressed by James R. Wigen on this website are solely his opinions and do not reflect the opinions of IFP Advisors, LLC, dba Independent Financial Partners, (IFP).  Investment Advice offered through IFP Advisors, LLC, dba Independent Financial Partners (IFP), a Registered Investment Adviser. IFP and Independent Financial Management, LLC (IFM), are separate entities.

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