In the Market Summary dated 26th February 2013, "The much talk about correction is coming, another rebound is exit for short-term investors." this was mentioned and after that market was so generous it went up for next 2 days for investors especially those short-term to exit. Now, with the US did nothing to prevent the sequestration and in probably about 2 months time US will be facing with the debt limit issue. Market has no short fall of reasons to correct. In fact, market should have started correction last week. Market will be volatile for the next 3 months or so till June. A market correction between 3% to 6% can be expected and if there is sudden negative macro events, the range could widen to between 6% to 10%. A 3 months time frame for market to hit a bottom then consolidate and resume the next leap, pretty reasonable !
Do not get panic with the market correction, this will serve as opportunity for short-term investors especially those who missed the recent wild run up. As a reference will be using defensive and high-yield stocks to monitor for market bottom. A drop in price for those stocks (especially S-Reits) which is equivalent to a rebound of their respective yield of between 0.3% to 0.5% from their recent low should be the market bottom.
There are lot of ways to accumulate for this correction, they key is holding power and patience. One can either wait for the most panic and fear moment to buy or do a dollar-cost-averaging method or spread out 3 price levels and buy into it when hit. Remember, only look at stocks with good fundamental (company not making loss or if making loss make sure it earning is recovering or improving type), price level traded at good discount to its NAV and has a reasonable debt level (not too leverage).
Have been asked recently also on what good for investment. Answer to the question is NOTHING ! for a long-term investor, nothing is attractive now, just wait for next recession when you have lot of choice to choose from. Current market is a trader market, good for short-term investors with time frame of 3-month, 6-month or maximum 1 year only. Come 2014, be extremely CAUTIOUS CAUTIOUS CAUTIOUS as anything can happen to sink global economy into recession again.
Enjoy the last leg of bull, make full use of it. Will see another maybe 2 more such dip or correction before everything crash down.
