August 8. Here’s a strategy for taking advantage of broad market swings: When you anticipate (or forecast) that prices are going to go down, sell equities and buy bonds (because the bonds drop less in value).

August 8. Here’s a strategy for taking advantage of broad market swings: When you anticipate (or forecast) that prices are going to go down, sell equities and buy bonds (because the bonds drop less in value). Conversely, a rule might apply if you forecast prices are going to rise: sell bonds and buy equities.

Here’s how it worked out for me: The $14,500 MMA I sold (some MMPAX, MPIAX and MVIAX) about two weeks has gone down in value by $2,207.65. But I am better off having sold it, because I avoided the loss. So I saved that amount, because I did not have to take that loss. But, ... I bought FAGIX, which has also gone down in value, … but not as much (because bonds are not as volatile as stocks). The $14,500 that I invested in the FAGIX is only worth $13,501.31 today. So that is a $998.69 loss. Putting the gain of $2,207.65 together with the $998.59 loss results in a net gain of $1208.96, as of today, August 8. So even though the markets are plunging down, I was able to "make money", basically by avoiding a larger loss.

What to do. One strategy is do nothing. That’s what I’m doing now! Haha. But I would feel better if I could do something!

Remember this? I am wondering whether the Dow will behave in a similar manner now. I do! My investments were about cut in half. The Dow hit a period low of 6,547.05 on March 9, 2009.