Hey Guys,
The market experienced an enormous drop on Friday and gapped down a big chunk over the weekend. We're talking about a 400-point drop in the S&P 500 since Friday's opening bell.
The market is extremely volatile and unsettled. But it doesn't mean the world is ending. I mean that in terms of "real life" and also in terms of the market. Here's an example of an S&P 500 chart from 2015 that demonstrates my point:
Each price bar is one day of price activity. You can see that the S&P 500 dropped like a rock for four days in a row, but then at time point, it started to rebound and stabilize. Over the next few months after this, it went on to establish new highs.
I'm not saying that what happened in 2015 will happen here again. I'm saying that many times when the market seems bad and scary, a rebound can start to take shape. There is clearly real risk involved, but the situation is far from hopeless. I want to be there when a rebound takes shape, and I will stick to my plan like always.
My stock positions for KMI and AIG hit their stop losses this morning. I'm fortunate that I didn't have more stock positions open during the plunge between Friday and now. The method of limiting myself to two stock purchases per day gives me risk diversification that helped me in that situation, although taking the losses on those two trades still wasn't fun.
I added two new stock positions today in the stocks account. I bought positions for HDB and ED.
If you have any questions or feedback, I'd love to hear from you.