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Learn about our thoughts and opinions on the markets and industry overall

What is the Stock Market Doing Today?

Who cares?  You shouldn’t.  You shouldn’t be buying stocks that make you worry about them each and everyday.  Unless you’re a high frequency quant trader, or a seasoned professional, this should be of no concern to you.  Honestly, if you were the quant or seasoned pro, you wouldn’t be googling this question in the first place.. 

So, what should you be worrying about?  A process.  How do you define a process by which to purchase individual stocks, mutual funds, ETF’s, indexed funds, or bonds?!  What’s your entry strategy?  What’s your exit strategy?  What criteria matters most to you? 

 

Do you care about the company’s (that you’re considering buying stock in) cash position?  A/R vs A/P?  Does their YOY growth pique your interest?  How about the volatility of the stock or fund?  Does the company’s concentration of top 10 clients concern you?  Does the prospect of them selling to another firm excite or concern you?  Buying another firm? 


There are a lot of questions that go beyond your traditional ratio metrics that you probably need to think about?  Do founder led companies tend to excite you more than CEO led companies that change leaders every 3-6 years? 

Once you’ve developed a process and criteria, next you should back test that to make sure you understand how this process would have worked out in previous market cycles. 

Once you have a clear grasp of how you will select opportunities out of your selected universe and how your process would have performed in previous market cycles, you’re on your way to investing in a portfolio that doesn’t need to be concerned with what the market does on a daily basis. 


Lastly, if the market is “plunging” as the media likes to portray 2% drops, what is your move?  Do you get out?  Buy more?  Buy in other sectors?  How do you identify the sectors that perform well in varying economic cycles?  When do you exit the investment you entered? This is a critical question. After a certain return? After a certain time period? Macroeconomic shifts?

If you want to tackle this beast on your own, stay informed, stay out of the headlines and trust your process. 


If you don’t know exactly where to start and want to find someone who does this more often than you and therefore maybe more effectively, give us a ring.  We may not be a good fit for you.  But, what if we are?