Understanding Stock Selection – What Pullbacks Teach Us – Become A Better Investor

The continuing rally today would certainly seem to mark the end of the recent pullback. Despite analysts and brokerages warnings investors of an impending coming summer correction, stocks have remained resilient which considering all the “bad” news out of Europe and China combined with the likelihood of a rise in interest rates this fall, is very impressive as you would think stocks would be lower.

The problem with investing, especially for the average investor is not knowing when to commit capital in a pullback or a dip. While dip buying has worked for several years including this year, it only works when we buy the dip at the right time. Unlike the larger investor who has hundreds of millions or billions at their disposal, we are limited by our capital. If I buy the dip at the wrong time, I do not have the capital to continually repair and rescue trades.

Instead by understanding what pullbacks can teach us, we as small investors can still benefit enormously and level the playing field between us and the large investor.

This strategy article from the category Become A Better Investor, is 1650 words in length and will require 7 pages if printed. It is available to USA members only.

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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.