About That Idea of Raising Cash…

It only takes a day or two of BIG dislocations in the market to remind you of the idea of raising cash.

But in the last few years – with the exception of Feb/March 2020 * – big declines in the markets have been quickly followed by even bigger bounces.

(* Note: The rebound from the plandemic crash in early 2020 was the biggest and fastest recovery in history)

Cue up:  Our recent comments about “Don’t be surprised if the Boyz, who took down the markets in early 2020, have at it again in late 2021 and into 2022.”

We’re not saying “I told you so” here.

Well, maybe we are…kinda…sorta.

But experience has taught us that Repetition is the Mother of Learning.

And in some cases, we may not appear to be repeating ourselves often enough.

So, let us repeat to you: “It’s a good idea to raise some cash before the end of 2021 and on into 2022.”

Raising Cash for the Inevitable…

How much cash should you raise?

That’s your decision.

And everyone’s situation is different so we’ll avoid any specific amount.

The point is, in order to buy stocks – especially at a discounted price – you need to have cash available.

And it’s always better to have cash and not need it then to need cash and not have it.

Raising cash gives you opportunities that most investors fail to achieve.

And it affords you the luxury of patience when purchasing.

Huh?

Example:  XYZ stock is trading at $50 per share.  But you want to buy it at $40 per share (20% under the current market value).

So, when you’re sitting on cash you can exercise patience and not jump in when stocks make their initial fall.

Instead, you should put in a Good Till Cancel (GTC) buy order at $40 and another one at $32.

Why?

When stocks are falling, they usually fall farther than you’d expect.

Do the math.

200 shares at $40 = $8,000.

100 shares at $40 = $4,000 and 100 shares at $3,200 = $7,200. That gives you an average price of $36.

That’s almost 30% under the market price.

So, exercising patience – along with raising cash in advance – is one of the best ways to buy stocks.

This is one of many tips we give you every month in our Short and Sweet Tips Column (HERE).

And for the cost of a couple of lattes’ you can have access to all of our archives – and investment tips – with no long-term obligation.

See for yourself (HERE).

And share this with a friend…but tell them:

We’re Not Just About Finance.

https://www.financialsmatter.com/do-you-make-these-mistakes-when-investing/

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Don’t Get Caught Like This…