Well, if you are familiar with this blog, you would have guessed that the answer I would give would be, time to buy BACK. This time around, the prices of stocks are still evidently high considering pre-pandemic prices. Therefore, there is no point rushing into the market thinking that it is cheap and has a good value. On the other hand, if you would have sold previously, know that there are opportunities to buy back, you would have been able to lock in profits from your previous exits and buy back gradually with a 3-10% yield per trade. In this post, I would like to make a point about thinking ahead so that all of our action plans are always logical and justified.

No point buying now just because the market has retreated

Know what you buy before you do. The answer I would give to almost all my peers and acquaintances is just that because there is never a right price to enter but at the same time, there will always be a reasonable price that you can accept to get some skin in the game. For example, you should always understand the implication behind your ”bet” on a particular company or asset. An example could be investing in Company ABC because it is providing services for public transport which is an essential service that is recovering from the impact of the pandemic. Therefore, investing in said company also means that you are betting that the economy will continue to improve and recover from the pandemic over time. As a rule, deciding to invest in something should never originate from hearsay or a dilemma.

You do not know how low it can go but all you can do is average down

Time for a reality check, there is no way we will be able to predict how much more the market will retreat or when it will rebound. That said, instead of feeling FOMO or too afraid to enter the market. Take on the most acceptable action plan you can follow. As a rule, focus more on accumulation rather than aiming for short-term trades. After your first entry, you might want to check out this post on how investors can determine intervals between stock purchases. In short, taking action is still always better than waiting indefinitely or waiting for a perfect opportunity that might never come.

You are considering cutting losses but are also afraid of losing out in the long run

This should be on some of our minds if we have entered too early or have bought back too early. Before we continue, we should be reminded that this is the price of investing as there is no such thing as a free lunch. These losses or drop in asset value is literally unavoidable hence, there is only so much when it happens. I guess the best advice I can give you is to accept the current state of your investments and look ahead to future opportunities. That is not to say that cutting losses is not an option but rather to not focus on the present slump and put your energy into more productive endeavors.

Closing Thought

There is no indication that the market is going to recover anytime soon but there is also no reason to believe that the market will retreat indefinitely. However, you can always take advantage of the current state of the market and come up with a concrete plan to stick with. Regardless of your returns in the next 6 months, you will be sure to learn a lot more from your experience than you would if you did not do anything.