You can ask yourself if you are using the right stock market investing strategy when corrections like the current one do worry you. Corrections Happen. You can't avoid them. You do not know if or when they happen. So how do you deal with it?

It would be great if you can predict exactly when corrections will happen. Maybe some people can do this. But remember that predicting the future is very difficult and those who attempt so would in any case always need to follow the markets on a daily basis very closely and to be able and willing to act quickly. Trying to pre-empt corrections, also means taking the risk of additional trading costs and maybe missed gains if the markets do now behave as you has seen in your crystal ball.  

When you want to spend only one hour per month on your stock market investments, it is better to have a strategy that allows you not to worry about temporary corrections. How do you do that?

If you look historically, corrections happen from time to time. In general, they are temporary. Markets go down around the 5% to 10%. If corrections are not part of a larger down trend, most often the markets have gained the lost ground again in a few months.

Make the temporary correction insignificant

When you make your monthly investment decisions based on trend expectations for the next 3 to 6 months, a temporary correction is insignificant. Yes, it means that your holdings are down now. But like the correction, that is temporarily.

Of course, when markets start to slide, it could be not just a temporary correction but a start of a longer down trend. How do you know what it is at this moment? You don’t. But if you use a proven system that warns you at the beginning of the bigger down trends, you know that you can get out of the market in time before the real damage is going to be done. That gives peace of mind.

So, if you are worried about the current correction, review for yourself if you are using a stock market investing strategy that is best for you.

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