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31.03.202012:59 Forex Analysis & Reviews: Evening review 03/31/2020. Investor question: Stocks significantly fell. When and how to buy?

Exchange Rates 31.03.2020 analysis

Above is a chart of the main US stock index - S&P 500. As you can see, current prices are approximately 25% lower than January highs. Stocks fell significantly - in the US and Europe.

Investors who were quite competent before - and left the stock before the fall or at the beginning, as well as novice investors ask a reasonable question - Buy? When to buy? How to buy?

Answers:

1. I expect a new wave of falling markets - when negativity is inevitable due to coronavirus and because of the forced stoppage of many businesses during quarantine in Europe and the US - when this negativity comes to the surface in the form of economic data - GDP decline, unemployment growth.

Thus, conservatively, you can not buy anything until the S&P 500 index returns to the last lows that we see on the chart. You can buy more aggressively now - but a little, no more than 30-35% percent of your account.

2. Furthermore, if you fall by at least 25-30% of the current levels (not earlier!) - you can buy another 30% of the account - and the rest - when it falls very low.

3. If it doesn't fall very low - and strong growth begins - then it will be possible to buy more on growth - but only when the economy shows clear signals of recovery (the economy, not the markets!), The GDP goes up, and employment starts to grow. Then we will buy more.

But this is not soon - no earlier than the end of 2020, I think.

Good luck to all. Observe the quarantine. Do not be ill.

*El análisis de mercado publicado aquí tiene la finalidad de incrementar su conocimiento, más no darle instrucciones para realizar una operación.

Jozef Kovach,
Experto analítico de InstaForex
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