Catching Stocks at the Bottom
So you have some money and you want to invest in the stock market. You watch the market everyday and realize the market is not doing as well as you would like. What options do you have? The fact is the market is in a steep correction and that may be understating the obvious. However with every correction come a bottom and a bounce back. A technical analysis of when that may happen is tricky as the market may send false signals, especially to the inexperienced investor.
Looking at a chart if the moving average of the market may help you find that bottom. Everyone has a certain formula for moving averages to establish a trend. Look at the 21-day moving average and wait for a confirmation of a movement upwards. That will give you an idea that the market may be turning, but individual stocks need to be investigated similarly.
Major brokerage house move money in times like these to bonds and money market accounts. For the individual investor this may be a good strategy as well. You will never catch the bottom of a market with any precision. The same could be said for individual stocks. Watch for trends and decide.This is a good strategy for investing for beginners as well.
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