Does today’s stock market offer short-term opportunities?
December 15, 2008 by Personal Liberty News Desk
Although the massive swings of the stock market are not for everyone, some experts have suggested that short-term gains can be made if investors follow a savvy strategy – particularly as so many stocks are selling at record-low prices.
Financial adviser Shawn Rubin told the Wall Street Journal that people may want to follow a "horseshoes and hand grenades" method of playing the market.
This involves ignoring the question of whether the stock market has bottomed out or reached a definite peak and simply rebalancing their portfolio more frequently, depending on how the market swings.
As an example, he suggested that an investor who maintains between 20 percent and 40 percent of their portfolio in stocks could subtly boost their buying during low periods, then readjust and "take a little of the stock position off" if the market rises by 20 percent.
If it jumps further, investors simply take "a little more off," Rubin explained.
Brett Arendt of the Wall Street Journal has advised people to take the bear market as an opportunity to rebalance the stocks they hold, since low prices increase the options for broadening a portfolio.