As we near the end of a very difficult year for most investors, the mood seems to be a bit pensive. The markets have fallen after the hawkish stance of the US Federal Reserve. Markets expected the Fed to indicate no further interest rate hikes, but none of that has happened. On the contrary, the Fed remains aggressive and the stance remains hawkish. The markets clearly had not prepared themselves for it, and we are seeing a change in sentiment globally. We have seen a sympathetic reaction across the market.
For investors who felt that they had missed the opportunity to participate in the rally, this correction is an opportunity to buy exactly what you wanted. There’s no merit in blindly putting money in expensive stocks. A measured gradual sizing up of the position is probably the best thing to do right now.
Some investors are still worried that the new year will begin on a negative footing. Most investors miss a good correction because they expect the correction to last longer and rue over their mistakes after the markets have rallied. Investors must use this opportunity to scale up their high-conviction ideas rather than wait for a further correction to happen.
The coming weeks will give investors a good opportunity to do exactly that.