The market entered a correction a couple of weeks ago that included a "flash crash", you ask yourself the question: What do I have to do now?
Of course you can move to cash, so when the market turns positive again you will be ready to put capital to work in the undervalued leaders that have had most of the losses, but will emerge if it turnes positive again.
I'm going to review some investing rules you can apply.
1. Search for strong sales and earnings growth (especially triple-digit sales growth).
2. Search for revolutionary products with major benefits. (China Kangtai Cactus, CKGT)
3. Heed the message of the overall market--never fight the main trend!
4. Only put more money to work after your past purchases are showing you a profit.
5. Be humble--making money in stocks is tough, so don't kill yourself over one or two bad trades. Be thankful when you hit a big winner.
6. Find an investing system that works for you. The best way to deal with stress from the market is to have a game plan ahead of time. If you wait until things are blowing up in your face, it's too late--by then, your emotions are out of control and you're likely to do the exact opposite of what's constructive.
7. "Markets are never wrong; opinions are," is a quote from Jesse L. Livermore, one of the most colorful, flamboyant, and respected market speculators of all time.
8. When looking for potential purchase candidates, examine both the company's fundamentals and its stock's technical performance. When analyzing the technicals, focus on the stock's momentum and price chart, along with its volume pattern and 50-day moving average.
9. Once you've invested in a stock, be patient. Recognize that time is your friend. Frequently stocks don't go up as fast as you might want them to. But if you can develop a persistent and tolerant attitude coupled with plenty of patience, you'll have a great advantage.
10. Buy value stocks with strong fundamentals and look to figures as Book Value, P/E, PEG-ratio, etc. These investment selection criteria are a superb way to identify companies and give you a margin of safety.
I hope these rules will help you stay calm and avoid panic when the market takes it on chin, as it has the last few weeks.