One thing we do have in common nowadays with 2008 is a collapsing oil market. The price of oil is now at the point to where it is doing more harm than good.
The fact that interest rates have been held down by the fed the last 7 years is also a concern.
We are in the midst of a global credit crisis. The US is actually doing better than just about everyone else these days, even though we've had a very tepid recovery the last 6+ years.
I actually did some buying and some profit taking yesterday. I've mentioned owning LaJolla Pharma for quite a while - it was up over double digits yesterday, and I took some off the table.
I had also bought a little of company called Macrocure Thursday after it had sold off some 75%. It opened up yesterday a good 50%+ higher than the day before, and I took about half off the table.
Bottom-up. Think more about your individual investment picks and how they are doing individually rather than worry about what the broad markets will do - they will do what they will do, and no one knows for sure what they will do in the next week, month, or year or longer.
If you're a novice, just keep on dollar-cost averaging every payday into your index funds or mutual funds.
If you're more advanced and more tactical, keep your eyes open for bargains. Keep an eye on your current holdings, and don't panic as long as the fundamentals remain strong in those companies. See these big market selloffs as buying opportunities as fundamentally sound companies become cheaper. Continue to dollar cost average every payday and buy more as these companies get cheaper.
Don't be afraid to keep some cash handy - 15, 20, 25% or so. Just don't go crazy and go to 100% cash or even gold or especially 100% short positions or anything - that almost never works out to your benefit for any length of time.
For those of us who are highly advanced and have a fair amount of money, you're probably covering some of your more volatile long positions with put options... And you're also probably using puts to bet against some more volatile companies you believe are way overpriced, in a fundamental decline, or are outright broken; you may also have some short stock positions against less volatile companies in similar positions. You can see times like this as opportunities to take some profits on companies that have had very good runs that aren't so cheap anymore (and increase your available cash reserves); to buy / buy more into good companies that have suddenly become rather cheap; to buy more puts; and to perhaps add / increase short stock positions.
Not a bad time to put a bit more into gold IMO. I'm also still putting a bit into crude and related investments, as I don't believe crude will stay this low for much longer.
It's a given that sooner or later we'd see a correction. It's also a given that sooner or later we'll see another bear market. I don't know if this is it, but I'd rather see one now than 5-6 years from now when I'm perhaps 50-100% or more wealthier than I am now.
I also would rather a bear market now and for the next year and a half (as opposed to further down the road) for other reasons. I would like to see another late '07 to early '09 scenario now, during Obama's last 17 or so months in office, so that those who believe "he tripled the stock market" can hopefully see how foolish they are.
I also think such a market downturn would be more likely to lead to a more favorable election outcome in '16, since most people (especially on the left) wrongly believe a sitting president and the federal government in general have very much control at all over such things as the stock market performance and the price of a barrel of oil.
