Without doubt, the market action over the past two days has been very challenging. During these difficult days, it is critical to rely on your investing rules. For more on investing rules, see our previous forum post "Procedure on a Hard Day."


Follow your sell rules on individual stocks, as well as the market rules. Do not allow fear or hope to prevent you from responding.  Managing your market exposure and protecting your capital should always be a top priority. In doing so, you afford the opportunity to invest another day.


Evaluate each stock in your portfolio on its own merits, selling the lower performing stocks first.  Be sure not to hesitate in taking action because it appears that the market is correcting, and we never know how far down it will go. When the market breaks down like this, the old saying is, “There’s the quick and there’s the dead”. Being frozen with fear is the worst thing an investor can do.


Best Returns,

Scott O’Neil
President, MarketSmith