Tips For Investing In a Hot Stock Market

On May 8th, the dow jones stock market ended the week positive for the 9th consecutive weeks. This is the longest positive weekly closing streak since May of 2007. It’s possible the streak can continue for several more weeks but the likelihood is slowly deminishing. After this week’s positive banking news on the stress test results, there are very limited positive news in the horizon that can keep the stock market on it’s course. Remember the last streak ended in May also and May is the month best known for the term “Sell in May and Go Away.” Below we will list a few things you should consider when you invest in a hot market like we have today.

• If you are buying on margin, begin to decrease your margin holdings immediately.
• Don’t chase a hot stock market, especially during the late stages of it, there will be buying opportunities down the line.
• With the market being so hot, there are very few stocks that can be considered bargains at this stage. It’s quite possible that as a whole the market may not return to it’s bargain basement prices of March 9th, 2009 but there will be selective stocks that dip to bargain levels.
• If you are truely in love with a stock (which we highly recommend against), sell some covered calls to protect yourself.
• Buy put options on stocks when you think it’s going down.

We wish you luck on your investments and as always do your own research prior to purchasing or selling a stock. We make recommendations based on our own research and this site is solely for the purpose of entertainment reading. Thank you for visiting Hot Stocks to Buy.