Call me crazy but believe or not, the time has come to consider to get back in now. I cannot say this is the exact bottom but at least it is very close. You do feel the panic now and it looks like a capitulation. Everyone is running toward the exit and throws in the towel. The VIX reached as high as 46 today, which is very high, meaning high panic sentiment in the market. One year ago, I thought the VIX was too low at around 20. Now I think it is too high to be sustainable. Historically in the past 20 years, only 3% of time the VIX was beyond the 40 mark and each time, it was followed by a market rally.
More importantly, the August low at $1100 for S&P 500 has been breached and the market is touching a new low now. The overall market is extremely oversold. When it bounces back, it will be powerful. When there is blood in the street and no one wants to hold stocks, it is the time to shop for bargains. Remember what Warren Buffett said, "Be fearful when others are greedy, and greedy when others are fearful."
If you have a list of stocks you want to own, you should consider to put your money to work. Just be mindful of position size and stop loss, you should be fine and I’m confident you will be doing great in the next few months at least. I will be adjusting my 401k portfolio now towards overweight of stocks. The stocks may decline further but I don't believe it will go down too much further. Even if it is not the bottom, it is around the bottom.
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