Very nice article by Rev Shark on realmoney:
No matter what is going on in the stock market, the nature of vast majority of investment advice is that you should continue to hold on to your positions and/or buy more. There is never a time when traditional investment managers will not find good "values." That is what people on Wall Street do. They find places for you to put your money. They don't want you to just sit there in some money market account because they won't feel like they are doing their jobs and they can't justify charging you fees and commissions. The end result is that very few folks on Wall Street will ever say they don't know where the market is headed. They don't want to be seen as uncertain because that doesn't seem very professional. They would much rather be wrong with great confidence than do little until there is greater clarity. Individual investors don't have to play that game. They can simply say, "I'm confused and uncertain about this market, so I will hold high levels of cash and wait for better odds before I put my cash to work." Traditional Wall Street really hates that approach because it renders useless all their predictions about market direction and advice about great values. If you have any doubts about that, just review all the advice and predictions made by Wall Street professionals so far this year. I'll bet that at least 90% of what you have read talks about bottoms, is bullish and suggests that you accumulate some great bargains. That is just the nature of Wall Street, and it doesn't work well at all when we are in a bear market like we are in now. Individual investors need to block out all that noise and embrace the idea that we don't know when the market will make a lasting turn. Once we admit that, we can track the action patiently and objectively. We don't have to rush back in with our precious capital; we can watch for things to set up and for the market to prove that it really can produce a lasting bounce. Trying to stay patient and unemotional in a market that is dominated by professionals constantly pushing you to do something isn't easy, but you'll be amazed by the control and comfort that it provides. You'll actually start to feel like you really will make some good returns again by staying patient while you watch all the others flailing about, making their grand declarations about what will happen next. The biggest problem this market continues to face is the crazy volatility. Some folks like to say this is a great trading market. Maybe for a few with ultra-short-term time frames, but for most traders, the moves are far too big, fast and random to allow for good trading. In markets like this you will hear a lot about five-minute time frames, and you might start to think you'd better trade that way. You might try it, but until we can pick individual stocks in a calmer market, the trading is going to be extremely difficult. We have a little softness this morning and the news wires are a bit slow; the focus is mainly on how bad this economy really might be. Overseas markets were mostly weak and we have oil down and gold steady.
