Fundamentally the economy is doing fine but investors remain concerned about global economies, Ebola, interest rates, Europe and the reduction in liquidity that is underway with the end of the Fed Quantitative Easing program this month. All in all, investors are worried and selling out. The problem with selling out is that it hits stop-losses and that means stocks tumble further, which inevitably hits more stop-losses and creates more selling.
My outlook had been for stocks to continue moving back up with the Fed minutes showing that they were determined to keep the economy afloat and growing. Their dovish comments on interest rates yesterday were enough to push stocks to an incredible rally, but overnight that changed and now yesterday’s rally is being given back.
It is obvious that my outlook was not shared by the majority of investors. But that does not mean I cannot stay focused and continue to plan, use strategies and grow my portfolio. Staying focused on the ultimate goal means I can brush aside the drama of a stock sell-off.
Afternoon Investing Strategy Notes For Oct 9 2014 – Stay Focused Through The Plunge
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