How to Weather These Choppy Markets

The stock market has proven to be very resilient in recent months. Even as Federal Reserve officials talk about the need for interest rates to be higher than expected for longer than anticipated, the markets have managed to hang on to the idea that if the pace of rate hikes slows, the eventual destination does not matter.

I suspect that the group of traders who believe this have never experienced rapidly rising interest rates or high levels of inflation, and will eventually be proven wrong.

Still, it will be a bumpy road for all of us before everything settles. We have already seen several sharp snapback bear market rallies this year, and I expect to see more before we find an ultimate bottom in stock prices.

The key to not taking it on the chin in markets like we are experiencing today is to avoid getting caught up in the enthusiasm surrounding these fast-and-furious rallies.

Often that is harder to do than it sounds. Here’s how to do it – and what stocks to avoid…

The talking head and financial media can get quite excited about these sudden moves, and you will hear many people trying to call the bottom. But in my experience, the bottom is only in once almost no one is trying to call the bottom anymore—and right now, with a P/E ratio of 21, it is hard for me to think an important bottom is in for stocks.

There needs to be more fear amongst most investors and traders. Everyone is far too…

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