2 Ways To Keep Investing in a Volatile Stock Market

When market volatility is occurring, it can definitely scare off investors. In this video clip from “The Morning Show” on Motley Fool Live, recorded on Feb. 15, Fool.com analysts Tim Beyers and Sanmeet Deo, as well as Director of Small Cap Research Bill Mann share some tips about how to invest even when the market is quite erratic.

10 stocks we like better than Walmart
When our award-winning analyst team has an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

They just revealed what they believe are the ten best stocks for investors to buy right now… and Walmart wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

See the 10 stocks

Stock Advisor returns as of 2/14/21

Tim Beyers: The way I handle this, I will just say this for me. I’ve always thought, and will always want to be a net buyer of stocks in every market. I don’t want to try to call when a market is overheated or undercooked or whatever it is. When I think that I’m paying too much for narrative then I position size, then I buy a little. When I think I’m getting bonus narrative then I pay more, I buy more. That’s how I do it. It’s not that I stop buying, I just buy less when I feel like I’m paying too much. When I feel I’m getting bonuses, like I feel they’re not giving enough credit for the optionality here, that’s when I buy more. That’s it. I don’t try to make it any more complicated than that Bill.

Sanmeet Deo: There’s also, I think I’ve learned about it when I was a member of The Motley Fool too like buying in thirds. If you decide, all right, I like this company, I want to put ten grand or something into the company. That’s how much I can put in. Don’t put it all in at once. Because the markets are very volatile right now too. You can almost expect that you’ll put some money in and the stock might just dip.

You know what, you can’t time that you can’t control that, you can’t beat yourself up about that because you’re just not going to be able to, as Peter Lynch, so elegantly stated, you’re just not going to be able to call that. But if you deploy a third of it, let’s say, and you’re comfortable with your analysis in your investment. See how the company does.

If it drops more, thesis hasn’t changed, the business hasn’t changed. Maybe then you can say all right, I’ll buy a little more. Then it could go up and it could be up on a positive earnings report. That means that the business is doing well is improving. Maybe they forecast some better results going forward, the business is improving.

The stock’s gone up, maybe I can still feel comfortable investing in it because even though it’s hard to invest when the stock is going up, the business is improving. If you think that business growth can continue, maybe it’s not a bad time to invest because you spread out your investment over the course of the stock movement. You just have to be comfortable with that type of investment.

Bill Mann: You’ve got to be comfortable. Exactly.

Deo: There’s times I invest in a stock and it dipped 5-10% over the course of the next couple of weeks after that.

Mann: These days, an hour. [laughs]

Deo: I know. [laughs] But I don’t really care because I put in the money because I know over 3-5 years, I’m very positive on this company.

The Motley Fool has a disclosure policy.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts