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Being an Investor in a Trader's Market

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Opportunities still exist. Here's how to spot them.

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I've received hundreds of emails from readers with questions regarding establishing long-term core positions at a low-cost basis from which to trade, as well as methods to build upon them during the recent market pullback.

The following email exemplifies the type of questions I've received regarding this approach:

Hi Carl,

The talking heads seem to [be] touting this as the one that will reverse the current rally we have been experiencing.

When I look out to the weekly charts I see many stocks at support at either the 20 or the 50 sma/ema. Your thoughts would be very much appreciated.

I had been concentrating on building core positions at a low cost basis so I could build around those on a pullback, which I think we have at this juncture. Do you think my judgment is flawed, and should I be positioning for further downside or begin scaling in to stocks at recent price levels?

Tim

I agree that not only the market indices but also numerous sectors and individual stocks are bumping against resistance or sitting right at support levels; many are at key moving averages. As you recall, I'm not a buy-and-forget investor, but an active manager of longer-term positions in my growth portfolios.

As an income and retirement investor, the growth portfolio complements my income holdings, and is one method I use to provide inflation protection. Core holdings provide cost support insofar as they allow me to build positions at a lower cost basis from which to trade with the core underlying position.
No positions in stocks mentioned.

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