The column takes a look a what investors and traders can take away from the big whackage in May 2006. I point out in times like these, investors may find it instructive to step back and see the bigger picture. Sell-offs and portfolio damage such as the recent market shellacking don’t have to be all bad. There are lessons to be learned.
What follows are the top 10 lessons astute investors might have picked up — or at least may have been reminded of — during the May 2006 selloff.
What are the 10 things? Here’s the list:
1) ‘Cheap Stocks’ Can Always Get Cheaper
2) Macro Issues Matter
3) Oversold Markets Can Become More Oversold
4) Support & Resistance Don’t Always Hold
5) Investors Have Short Memories
6) A Major Shift Is a Subtle Process
7) Stop Losses Are Lifesavers
8) Money Management Is Crucial
9) When Your Timing Is Off, Step Away
10) Smart People Do Dumb Things
Be sure to check out the column for the full explanation of each of these items; its posted on The Street.com (free).
10 Lessons Learned in the Selloff
5/30/2006 10:16 AM EDT