Never Waste a Good Crisis

 In The Lonely Bull

Crises in the stock market occur rather regularly.  Most pass quickly and represent no fundamental change in the business outlook.  These do offer an opportunity to acquire bargains or perhaps upgrade portfolios.  Stocks that have been disappointing in some fundamental way can be replaced by new opportunities.

Another way to use a perceived crisis period is to rebalance.  Positions that have had exceptional performance and may become too large a portion of portfolio value can be reduced in size and the proceeds used to add to some laggards that may be offering exceptional value.  We are always looking for great investments and opportunities to acquire or add to them.  Rebalancing has the benefit of reducing portfolio risk by maintaining good diversification and balance. 

A perceived crisis and sell-off are often an excellent time to upgrade and enhance future returns.

Stay steady, my friends.

The Lonely Bull 

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