“Investors who entered the commodities market at its peak are now grappling with anxiety and regret. However, these emotional reactions won’t benefit investors or traders. Below are some tips for navigating the current market downturn:
- If you believe you’ve made the right stock choices, take a break from monitoring the market and engage in enjoyable activities like exercise. The market is already going through a correction, and if you haven’t been stopped out or placed earlier stops, this may be an opportunity to acquire more shares at lower prices. Many experts suggest the next rally may start between late July and Labor Day.
- Consider whether the fundamental factors that drove the commodities boom have changed. If not, the current downturn may be a temporary pause. For instance, Russia’s interest in nuclear power and China’s nuclear expansion plans continue. If you’re invested in uranium stocks, note that spot uranium prices remain strong.
- If you’re concerned about specific investments, shift your focus from watching stock tickers to assessing company fundamentals. Has the company’s story remained consistent, or have there been significant changes? Refer to #7 A, B, and C below.
- The adage suggests that when you feel like selling everything you own in a particular category, it might be the right time to consider buying more. This advice is particularly relevant for retail investors. Professionals often sold at the peak and are now gradually accumulating shares from those who waited until the downturn to start selling.
- Historically, major events have marked the end of bull cycles. For example, the Three Mile Island incident marked the end of the last uranium bull cycle. Be alert for significant, far-reaching events that could signal a market turning point.
- Before deciding to sell, ask yourself if you want to hand your shares to opportunistic bargain hunters who could profit from your losses.
- Given that panic is common during market downturns, consider these basics for the uranium companies you’ve invested in:
A) Check the company’s cash reserves. Companies with strong cash positions established during the previous rally are better positioned to weather the storm and move forward when the correction ends.
B) Has the management team remained intact? Unless key executives have departed recently, the fundamental story of the company likely remains unchanged. Companies with strong technical teams tend to be resilient.
C) Verify the status of the company’s properties. If the company announced changes in the quantity or quality of its uranium resource, that’s one thing. If not, the uranium is likely still in the ground.
Remember the biblical advice: ‘When did Noah build his ark? Before it began to rain.’ In the midst of a market upswing, consider this wisdom and plan accordingly.”