As investment advisor Gary Krewson sagely put it, “Now is not the time to start a long trade; be patient.” Stock markets around the world have been in a state of flux since the start of 2020 due to the coronavirus pandemic. Equity markets have witnessed several severe swings and dips in prices, leaving investors feeling overwhelmed and paralyzed.
For investors who already have long-term positions in the stock market, it might feel like a really difficult time to stay patient and not panic and sell. However, for those looking to engage in long trades, now is not the time. Long trades involve buying assets with a view to holding them for the long term and profiting from the eventual rise in their value.
In times of market turmoil, it is advisable to stand back and wait for the dust to settle. The markets can, and will, have periods of greater volatility and lower liquidity as participants play it safe and take a wait and see approach. While it is important to remain vigilant, experienced investors will tell you to be patient and cautiously observe the situation.
In such a situation, it might be tempting to jump in and try to capitalize on the possible upturn in markets. This may work in certain cases, but the wiser investor will typically avoid taking risks at times of such uncertainty and will instead focus on finding a good entry point.
Hence Gary Krewson’s words ring true – “Now is not the time to start a long trade; be patient.” Long-term investments are for those with a lot of patience, those who are not swayed by market swings but have the prudence to see the long-term picture. Conditions of the markets are fluid, and the most important advice to keep in mind is to be patient. While some may find the temptation of a short-term gain hard to resist, it is often the case that, in the long run, patience will be rewarded.