“I would say the most important thing for investors for 2015 is know you’re short term time frame.”
That’s the advice of Michael Batnick, director of research at Ritholtz Wealth Management. “It’s important to define your goals, and whether or not you’re looking at oil stocks to rebound, or gold to continue its down trend, I really think it’s important to define who you are as an investor or a trader and go from there.”
Why? Because the markets are unpredictable right now. When Yahoo Finance asked Batnick about the commodities selloff – he said it’s impossible to predict whether the trend will continue. “Right now, commodities are trading like penny stocks… when you see giant markets trading so volatile, it’s concerning for sure.”
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As far as the S&P 500 (^GSPC) – we asked Batnick what warning signs to watch out for that could potentially derail a bull market. “Your guess is as good as mine,” he said. “It’s not going to be what people expect. So the canary in the coal mine is really hard to anticipate.” He also observes that initially people were watching the Russell 2000 (^RUT), then Russian President Vladimir Putin, now they’re watching commodities. “There’s always something, and it’s not going to be what the majority expect.”
That’s why it’s so important to know your time frame. “Are you a short term trader? If you are, who cares? If you’re an investor, well, don’t look at [the market] every day.”
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