Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Let Your Risk Tolerance Determine If You Buy the Dip

by September 24, 2022
September 24, 2022
Let Your Risk Tolerance Determine If You Buy the Dip

At its low on Friday, the Dow Jones closed below its June 17 low of 29,653. The S&P got within 11 points of its June low of 3636. The NASDAQ held above its June 17 low but still saw deep losses. All adding up to what? Buying opportunities, especially for those of you who think longer-term. And for those of you who have little tolerance for risk? Well, you should do fine as long as you stay disciplined.

For example, as you can see in the chart below, the S&P touched 3636 on June 17. At today’s low, the S&P got to within 11 points of that June low. On the flip side, the most recent high of 4325 on August 16 is now 18.5% above today’s low. Do I expect the S&P to get back to that 4325 level anytime soon? No. But I do like the outsized upside to downside reward to risk at current levels.

Note also in the above chart the RSI of 28.90 and stochastics close to zero, both flashing extreme oversold levels. In fact, look how the S&P bounced every time the RSI got down to or below the 30 level over the past year.

This is where discipline comes in. If we know the June 17 low of 3636 represents KEY price support, then we should be able to keep any losses to a minimum; i.e., a move below that level means it’s time to exit long positions for those with less risk tolerance. For those who care more about the long-term, you could be looking at some great opportunities — i.e., stocks that could make sizable moves — once the market settles down.

For example, look at the chart below on Advanced Micro Devices (AMD), a company that has continued to reiterate its financial strength and has fallen 60% since its November 2021 high. Do I think AMD is going to move back to that all time high any time soon? Of course not. But do I think that, over time, AMD could increase by 50%? I do. What if it takes a year to get there? So what? How many investments can you make that might produce a 50% return in a year?

This really is one of those rare times where you can have your cake and eat it too. There’s not much downside risk at today’s level on the S&P if you’re a short-term trader and keep a tight stop at that June 17 low on the S&P of 3636. If you’re a longer-term thinker, you’re getting a heavily discounted market. And if you’re looking to reduce risk even further, consider taking a partial position at today’s levels and adding on any further pullbacks, because,as we’ve seen time and time again, over time, the stock market produces tremendous gains.

In the meantime, if you would like to get access to timely and highly informative market insights from our Chief Market Strategist Tom Bowley, just click here and you will receive our EarningsBeats Digest every M, W and F FREE OF CHARGE! It’s a MUST-read!

At your service,

John Hopkins

EarningsBeats.com

0
FacebookTwitterGoogle +Pinterest
previous post
Kevin McCarthy Releases GOP Commitment to America – A Safe List of Platitudes that Is as Uninspiring as He Is Authentic – Did Frank Luntz Write This?
next post
Crooked Hillary Compares Trump Rallies to Hitler Rallies – Claims Trump Supporters Were Raising Arms in Nazi Salute (VIDEO)

You may also like

Bearish Opportunity in Tractor Supply Co (TSCO) with...

December 9, 2024

Stock Market Sell Off: Is the Bull Market...

December 19, 2024

Small Caps Join The Party — Here’s a...

March 2, 2024

Who will Win the Battle for the 200-day...

November 4, 2023

3 Expert Earnings Plays: Maximizing Reward, Minimizing Risk

February 9, 2024

Magnificent 7 Not All Magnificent!

February 29, 2024

GNG TV: Equity Markets Hanging on to “Go”...

May 26, 2023

The Bullish Case for Gold

February 18, 2023

Stocks Tentatively In a Trend but Could Face...

February 23, 2023

Pre-Earnings Moves Are Underway And History Provides Us...

July 6, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump ally stands firm against ‘big, beautiful bill’ despite pressure: ‘It’ll completely backfire’

      June 8, 2025
    • Rubio condemns assassination attempt on Colombian presidential candidate Miguel Uribe

      June 8, 2025
    • Obama WH physician says Biden doc should have performed cognitive test

      June 8, 2025
    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,571)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved