Stocks Bounce as 'Hindenburg Omen' Strikes

Stocks Bounce as 'Hindenburg Omen' Strikes



I am not alone in believing that stocks have more volatility ahead.  Please read the article about the Hindenburg Omen above.  I am making a little money in dividend stocks like MORL and AGNC that have held up fairly well in downturns while they continued to pay high dividends.  However, I am a great believer in diversification and strict allocations of my money.



For example, I always want to have money ready to deploy on market pullbacks.  So, I allocate around 20% or more of my money to cash.  Since I know the economy is okay, and the long-term trend of the stock market is still up, I am not afraid to buy at intermittent bottoms.  If you can make a 10% return on your trading money from the bottom just five times per year, you will make 50% each year with that money.



As much as I think the market will be volatile enough to make money trading, I always remain diversified in case I am wrong.  Quality dividend stocks can be your bread and butter while trading allows you to hit home runs if the opportunities come along.  I like playing ETFs for the home runs because you never know what might happen to individual stocks, and ETFs like UDOW and SOXL follow general market or sector trends.  Just buy at the lows and sell when you are up 10-15% because we will always get downturns again sooner or later.