I could not understand years ago why my returns under-performed the market. It was simple, I was investing for the long term but trying to guess the short and mid term price fluctuations. So I would see a price rise and sell out only to see it go higher, or I would see it dip, sell out only to see it recover and jump back on board. I was mixing long term investments with short term trend trading! Once I stopped that and switched to always long and add on the dips sell extensions (and only side trades), my returns went way up! This evolved into my 70/30 portfolio+- strategy.
Many are focusing way to hard on the short and medium term price action. If you open up the trading platform, your impulses take over and you feel like either your missing out, or your going to lose $. This is the reason we have mentioned over and over and over STOP TRYING TO TRADE CORRECTIONS and TIME THE MARKET! If you are not a disciplined trader, and can not read charts then you should be sitting back adding to your position, taking notes and making paper trades. Let me put it simply. If something goes wrong with your car and you want to fix it but have to call your brother in law every 30 minutes to see if you did something right, you probably should not be fixing your car!
We have a simple system that works. Why mess with it! 70% of your portfolio is LONG as long as the long trend is in tact! During bull runs we are fully vested, during corrections we tighten up to core and cash for deals. It does not get any simpler than that.
So last Thursday we noticed a top "may" be forming and so we went into correction mode, closing out trades, taking our profits off the table, getting to our cash position, and getting rid of losers. Why? Because losers are the first to go in corrections! So our portfolio is tightened up with winners and we have cash on deck, and in corrections CASH IS KING!
Bottom line successful investing and trading requires discipline. Looking at the longer term trend we clearly have not broken the . The longer term is still above 40. I personally have added a little as I mentioned. I have an order in at $14300 but it didn't get filled. One other note is the similarities between the November correction and the current correction pattern. There is no reason to fear and be in and out of the market during a correction. Corrections happen and are a buying opportunity for smart investors. Where do you buy? Well that is your decision but I never buy in all in moves. I come in in blocks. Add $2000 here, pulls back I'll add another $2000 etc. But I personally am long term with a $23,000 target. Do your homework after all its your money!
Disclosure for those following: I closed out ZEC and added the proceeds to DASH XMR DCR and XRP.
Now we are at 14,088. This is why trying to guess just does not work.