This Is the No. 1 Move Investors Should Make Before Buying Stocks Right Now.
Investors always need to balance risk versus reward, with industry watchers increasingly warning about risk right now.
Overview
Bank of America (NYSE: BAC) has warned about the risk of a market correction. JPMorgan Chase (NYSE: JPM) CEO Jamie Dimon has highlighted the "tectonic plates" that could collide and cause a market earthquake: elevated valuations, geopolitical conflict, inflation, and high debt levels. Such warnings don't mean you shouldn't buy stocks, but they suggest that you should assess the amount of risk you are taking on when you do. Here's the No. 1 move to make before buying stocks right now.
I lived through the dot-com crash and the Great Recession's bear market. They were brutal periods for investors, with stocks falling day after day, slowly eroding the value of my savings. Unless you have lived through a deep bear market, it is hard to understand just how unsettling it can be. Forget the claws of the bear; fear is what claws at your mind day and night as you worry that you will lose everything. Jamie Dimon's "tectonic plates" analogy is eloquent, but don't let his fancy words hide the truth: there is material risk today that your portfolio could be brutalized by a bear market.
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Originally published at www.fool.com.