The market is primed for a pullback.
We cannot know whether the sell-off will come next week, next month, or sometime thereafter. But it seems a market correction – an overall drop of 10% or more – is coming sooner than you think. And, frankly, we look forward to it after the irrational behavior we have seen in the markets recently.
Of course, we are speaking mostly about the collaborative strategy retail speculators are using to squeeze short sellers from highly shorted stocks, like GameStop (GME) and AMC Entertainment (AMC)… with no regard for the fundamentals of the businesses or the fact that these companies are struggling holdouts of dying industries.
It is OK to make speculative bets on stocks from time to time. And if you have money to play with and want to make some “just for fun,” gambler-style investments, that is your prerogative. But please remember… that is not what we do here.
At Vimvest, we think long term. We do not chase quick returns. We do not “trade” stocks. We invest in Exchange traded Funds based on deep study of the fundamentals – revenue, profitability, using science as our guide.
Market sentiment can move prices significantly in the short term. But it is the fundamentals that drive sustained stock price performance. You cannot simply wish them higher.
We are not calling a top or predicting a depression, but corrections are a normal and healthy part of a long-term rising market. That is why we see stock market corrections – like the one we had last year – not just as a healthy, natural part of the investing life cycle… but also as an opportunity.
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