I Guess I Missed A Good Buying Opportunity

So far, 2016 has been a great example of why timing the stock market is so difficult! The year started off as one of the worst in history and everywhere you turned there was some Wall Street pundit predicting nightmare scenarios. Dropping oil prices and China’s march toward a recession were the two main drivers of investor’s panic. If you didn’t sell any stocks during that period the chances are that you at least thought about doing it.  

February 11 turned out to be the bottom and from that point on the stock market has seen a pretty steady upward ride as the chart below shows. 

2016 S&P

Looking Back Is Easy. Actually Doing Something When It Is Happening Is Hard

Its easy to look at that chart and say that I should have bought more stock in February. Any time in February turned out to be a good time to buy. But who knew the market would turn around like it did? I sure didn’t. 

If you bought stocks in January you were shocked to see the market continue downward almost unabated. There were some truly scary days in there when the markets dropped big. Its hard jumping in with real, hard earned money when the carnage is going on all around you and there seems like no end in sight. 

And when the markets started to tick back up in mid February, who knew they would keep going up like they have? I didn’t. As it was happening I was thinking that “surely stocks might reverse course and head back down again”.

Its puzzling to me how can things could have been so bad and prompted so much selling only to reverse itself almost on a dime. I can’t predict what will happen in the future and the chances are that neither can you. THAT is why timing the market and actually acting on things as they happen is so tough. THAT is why I am a long term investor.

Did You Sell And If So, Did You Buy Back At The Right Time? 

Many investors panicked at the start of 2016 and that is one reason why the markets were in free fall. But how many of those investors sold before the very bottom and then had the guts to buy back in somewhere near the bottom? I would guess not too many. 

If you are going to sell in a down market, unless you want totally out of stocks for good, you have to get back in lower than you sold for it to be profitable. That is hard to do. VERY HARD!

I must add that this story isn’t over. 2016 is only three months old and a lot of things can happen the rest of the year. In fact, things could head back down tomorrow and the markets could end up lower than their February 11th lows. There are some experts that are prediction just that. However, as of right now at the end of March, it sure looks like I missed a good buying opportunity. But I mustn’t be too down on myself and just glad that I never sold a stock in panic and my portfolio is now up for the first time this year.  

3 Responses to “I Guess I Missed A Good Buying Opportunity”

  1. David Anning says:

    Hi Bruse
    I found this to be true, CMG is expensive and most likely will not make you anything for the next year or two. This has been my experience.
    I would put my money in good stocks in the range of $50 to100 that are expected to grow $10-20 and are playing a div.
    I don’t buy any stock now at their 52wk low just to see them go lower and then hold on to them for 2 years.
    I love your site

  2. T-bo says:

    Hi, I find your website very interesting. My question to you, if I am a long term investor, does it really matter when i buy stocks? Right now things are on an upswing, but they will inevitably go back down… Even though we never know in the present moment how low it is going to go, should we not buy when it is low… maybe close to 52 week lowest price on a certain stock for example.


    • Bruce Alan says:

      For real long term investors (5 to 10 years or more), it matters less when you buy. But it is obviously better to buy things (stocks included) when they are cheaper rather than more expensive. The three hardest things in stock investing are 1) what stocks to buy 2) when to buy them and 3) when to sell them.

      Buying at 52 week lows are great as long as the stock prices are not there for a real reason…for instance the company could be having trouble and future prospects are not as good as they once were. That is the challenge: is a stock low because of the overall market or is it low for a reason? Think of Chipotle (CMG) that is near a 52 week low but it is there because of its troubles with E.coli in a few of its restaurants.

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