It's been a rough month for most of us traders. As September comes to a close, what should we expect from the coming week of trading?
With outflows from the stock market being more than ever and with the indices being severely
overvalued, the fear in the market is undeniable. In addition, Evergrande has yet to cough out their interest payments, and China just threw another blow to cryptocurrency (even though this is not new from them). Investing right now seems to be the last option for the typical risk-averse person. Yet, there will also be opportunists who swing in and buy the dip, without the fear of it dipping further.
So what's the right move then? Do we buy when others are fearful, like what most stock gurus preach? Or do we wait for the dust to settle? I'd be extra cautious in today's market and I'll only invest in what I can afford to lose. In a volatile and dangeous market, it's good to put some investment in index funds like $S&P 500 index(.SPX.US)$ and $NASDAQ 100 Index(.NDX.US)$ , or safer and more established companies like $Intel(INTC.US)$ ,$Apple(AAPL.US)$ and $Berkshire Hathaway -Class B(BRK.B.US)$ . Yet, it's no reason to panic sell any of your other holdings, especially those that have good potential but are just being dragged down temporarily. Some examples like $NIO Inc(NIO.US)$ ,$Li Auto(LI.US)$ ,$XPeng(XPEV.US)$ ,$Futu Holdings Limited(FUTU.US)$ and $UP Fintech(TIGR.US)$ are all solid companies which have been indirectly impacted by the recent negative press surrounding Chinese stocks and investments in general. I'm not saying they will definitely rebound soon, but let's not rule it out. For my options traders, this could be a good time to sell some puts at the lower price levels for these companies. That way, you'd get a premium in the case of a reversal, or if they expire in the money, you'll just hold these stocks at a huge discount anyway and sell them on the next run up. There's risk involved for sure so do your own due diligence before doing anything!
It's a crazy market climate and all of us are getting hit left and right with new things, be it positive or negative. What's important is that we stay calm and think through our decisions. Panicking is your worst enemy in the stock market, and you'll end up losing most of the time if your decisions are mainly fuelled by anxiety, as opposted to logical reasoning.
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