All Hail The Correction!
by John Whitefoot for Peter Leeds Inc
TORONTO, ON (RUSHPRNEWS) August 27, 2007 -â€œI knew the markets were going to crash! Didnâ€™t I tell you the markets were headed for a fall?â€ Those were the words I recently heard from my acquaintance, the one I like to call The Penny Stock Dandy. Like all investors I suppose, he fashions himself a stock market guru. Though not an awfully astute one. His ongoing predictions have kept him out of the markets for months.
And really, one of the first steps to being a stock market guru is predicting its inevitable rise and fall. Unfortunately, to be taken seriously you should probably be able to predict the market with some certainly.
You canâ€™t just look at the numbers, see weâ€™re trading at record highs and cry the sky is going to (eventually) fall. You also canâ€™t make excuses as to why your predictions took 23 months to come to fruition. With that window of opportunity we would all have TV shows telling people what to do with their mad money.
And the fact of the matter is, I told my guru-friend, the markets didnâ€™t crash at all. If anything, I think the recent decline was a normal (and yes, bittersweet) correction in an ongoing bull market. Stocks were overdue for a normal 10% correction, and the subprime mortgage woes provided a legitimate excuse.
In fact, the current bull market had gone 1,591 days without suffering a 10% setback. Thatâ€™s the second longest streak since WWII. If anything, the recent correction helped eliminate the marketâ€™s â€œspeculative excesses.â€
After all, the marketâ€™s recent selling was driven more by emotion than by fundamentals. Factors such as robust global growth and ongoing Mergers and Acquisitions all point, to some degree, to the ongoing stability of the current bull market.
Yes, penny stock investors are likely to see more volatility over the next few weeks, or at least until investor nervousness fades. But when hasnâ€™t â€˜fearâ€™ been a motivating factor in the stock markets?
â€œItâ€™s hard to gauge the actual depth or length of this, but we think it would be measured in weeks and months. It wouldnâ€™t be measured in years,â€ noted one strategist.
So donâ€™t let last weekâ€™s 10% dip ruin the party.
No matter what the markets do…great penny stocks will continue to be great penny stocks â€“ and, all things being equal, their share prices will follow them. It is not uncommon for a stockâ€™s price to hold steady or even creep higher while the markets, in general, are trending lower day after day.
But even good penny stocks can take long slides.
The real question then isâ€¦when is the right time to take a position? Anyone can say â€˜buyâ€™ when the markets are down. But what is the bottom threshold where you take your position?
There is no easy answer. Just like there is no easy way to make money on the stock markets; despite what some claim. The markets are always a risk. Just as those who took large positions early last week.
If youâ€™re optimistic that the penny stock youâ€™re looking at is a sound investment, it will continue to be after the dust settles. And the best time to get involved is when jittery investors unload their positions.
Yes, people lose money on the market every day. But no-one has ever made money sitting on the sidelines. Not even a penny stock dandy.
About Peter Leeds:
Peter Leeds, CEO of peterleeds.com is also a successful book author. Leeds is widely known in the industry as the Penny Stocks Pro, a reputation built on giving clear and informed financial guidance based on years of investing in penny stocks, a passion that started at the young age of fourteen when he invested and lost the hard-earned sum of $3,800. From this modest beginning to todayâ€™s own financial success, Leeds learned by mistake and developed LEEDS ANALYSIS, a proprietary system of analysis which enables him to pick winners in the penny stock market and make suggestions in his newsletter. Leeds has helped thousands of others achieve their dreams of greater wealth by subscribing to the PeterLeeds.com newsletter.
To request an interview with Peter Leeds, contact his publicist Anne Howard at 310-295-9578, or at firstname.lastname@example.org or visit the Web site at www.peterleeds.com
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