What to do when risk is everywhere...

As you all know, I'm quite bearish for the current market for its near term and have been constantly talking about risks for weeks. So naturally some people don't like it as they may happen to be somewhat bullish or at least not so bearish. That's normal of course as this is exactly how the market is performing: bulls fighting with bears everyday!😇 Here is what I just heard some feedback about my views. I saw someone "complaining" that due to my constant negative market view in 2019, they were afraid of investing and lost the opportunity of enjoying the bull run then. To be fair, this guy did clarify that it might be due to his/her own misunderstanding of my views that led to his/her cold feet! While I was a bit flattered to learn that my blog has this kind of influence on people's investment behavior, I do feel I need to make it very clear how my blogs should be read.

- First of all, whatever I'm talking about here is my personal views and I can be totally wrong for sure! So never take it for granted for anything. After all, there is no certainty for anything in the market!

- Secondly, investing is a very personalized thing that needs to take into consideration a lot of factors, especially timeframe, timing, long vs short term goal, risk tolerance, etc. So there is no such thing as one size fits all type of advice. Most of the time, I'm just talking about the current market situation as a wholed either bullish or bearish or neutral. I don't recall I have ever recommended anyone to just blindly buy or sell anything here. Most of the time, I just call for caution when I see the market extremes. Granted, I tend to be early and the market extremes tend to last longer than I'd expect. So never take my words as an immediate timing indicator.

- Lastly but not least, the market is never exclusively either black or white, even at its extremes. It is often a mixed type but weighted more on one side at a certain point of time. So even when I see a very bearish setup for the market as a whole, one can still find something worth buying. As a matter of fact, I'm constantly buying or going long for something even though I may be very bearish on the market at the same time. 

Need an example? Here is an easy one: you may recall that I called  Rotation has started! back in Nov last year while the overall market was red hot back then, especially for tech stocks. The two sectors I highlighted then were financials and energy, which I believed would outperformed techs in the months ahead. Where here is the current situation for the two vs the techs. I hope you agree with me that it was a spot-on call as both lagged sectors have been doing quite well in the past 3 months or so, especially the financials. So even thought I have been warned about the overall market euphoria, you don't need to just hold cash and hide somewhere but you can make some good money from the financial and energy stocks. 

Another one I like right now is the precious metals while I'm in general very concerned about the overall market. Although gold and silver are still a bit struggling for now, which may continue for a while, one can still make some good money from it as long as you know how to play with it. Here is an example of an income option trade I'm still holding for AGQ, which will expire next week. It is already showing some good money while AGQ is still quite volatile with wide gyrations. I'm pretty confident this trade will give me a full profit (about $22K) in a week from now. 

  So here is my general guidance how to read my bearish view on the market: I basically just advise not to blindly chase highs. If you have already heavily invested or are going to buy aggressively when the market is shaky, just be prepared to handle a sudden trend change or panic selloff. As long as you are comfortable with your own risk management for a potential market plunge, you should not be afraid of buying stocks regardless of the market condition. Hope I have made myself very clear now😏