With the recent rally, I’ve found myself back at breakeven all time. In the current economic state, how would you react? If you were a new investor just jumping in, what would you do?
Option #1 Sell:
The global economic outlook is not good. Do you consider yourself lucky to be at breakeven, wait the next several months on the sidelines, and see if layoffs start/how inflation reacts? Greatest potential for missed gains, but safest.
Option #2 Hold:
Market is down 15% YTD. Average recession is 30-35% downturn, and we hit 25% earlier this year. You have money on the side you could tap into, you think we’re nearing a bottom, but maybe not there just yet. Risk of going back into the negative, but potential for gains as well.
Option #3 Buy:
You think the recent rally was the bottom, that we are nearing the bottom, or you’re set on cost averaging down regardless of the situation. You’re invested for the long term regardless if there’s another 30% to go. Greatest potential for gains and losses.
In a way, if you could walk out of the casino with all your money in your pocket, what would you do?
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