One week we’re done with market crashes, the next week there’s more talk of bubbles and Wall Street antics wasting taxpayers’ money. This list of market doom headlines is a good enough reminder of how the fear for the end of the world felt like just over one year ago now in early March 2009.
What do I regret most about the crash in hindsight? That I hadn’t loaded up on more cheap dividend growers, of course. I did make a few good buys, but if I had had more funds set aside just for that purpose, I’d be in a better cashflow position now.
I’m sure you learned a similar lesson. This time, (or next time), because we know it will happen again, make sure you’ve got your bust-buying fund in place. What good is a stock watchlist if you never have the funds to act on it? I’m not sure how much you usually put down on a stock, but I’d save up, say, enough for 5 bargain buys at minimum.
Favorite holdings? Stocks you always overlook? Some that always seem too expensive?
Write them down, estimate the share price, figure out your entry point, and then save the money and wait. Keep track of their performance on the way up as well as down. Get to know how they react to the market. It will help you determine when to make the purchase.
We can argue all we want about deflation, inflation, hyperinflation, and whether all currency pegs are equal – but if one thing is for sure, it’s that there is A LOT of debt swishing and sloshing around out there, and in very INEQUAL amounts across nations. This creates huge economic imbalances and it’s akin to pouring gasoline on a fire, or flooring the accelerator, or whatever other ill-boding, cliche action metaphor you can think of.
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Did you learn your lessons from the past crash? I did – I think I’m a better stock picker now because of it. So learn your lessons too, and get ready for the BIG correction when it comes – don’t jump too early on a mild correction, a natural pullback. Wait for the tsunami. Wait for another October 2008. We’ve already felt it once, so we should be able to recognize it again.
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It takes money and discipline. Not easy to buy when the seller is expecting the sky to fall!
I agree with you, it’s only a matter of time before another October 08.
It’s baked into the nature of the cyclicality of the markets. Only this time, the “waves” are higher and the “troughs” appear lower – everything more volatile.
Great article, as usual. During the last crash, which was the first one I experienced, I loaded up on index funds, which eventually produced a considerable return. But reading your article I realized that next time (and I agree with you that the next one is coming) I want to stock up on a couple of dividend payers. I’ll follow your advice and start saving for them right now.
Great article ME!!
I wrote a similar post on my blog yesterday, and posted it this morning, writing about our lessons learned from the last year and a half, and how they are helping us become more financially healthy.
A good idea is to go back through the charts and re-examine just how your favorite stocks (or those you’re looking at) performed and reacted according to market events. It could be a good barometer as to how they might react again (given their position within their sector, etc.).
Unless I see the banksters reigned in by way of regulations aka Depression era safeguards, I won’t be saving any money to invest – EVER. Their greed, manipulations are too Machiavellian for my small mind to understand and process. You can play in the coming tsunami if you want. But remember, its just paper and as long as our gummerments are elected by bankers and not people, the risk is just too high. As folks like me withdraw from the system, liquidity will constantly decrease and paper will eventually become worthless. No one will trust it. Shorting and its duplicatory processes will be the bete noir. But don’t let me stop you from the fun and games.
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