The current extreme volatility of common shares is grating on many investors. We believe, however, that this inordinate price variability can be used to advantage. For instance, we follow disciplined buy and sell targets for our selection of fundamentally undervalued common stocks and due to frenetic market conditions a security may suddenly shoot up towards its target price. As a result, we will frequently reduce our position. Correspondingly, if the shares decline precipitously due to excessive market fear and negativity we will often repurchase the stock.
The fact is: with frenzied market conditions, abiding by disciplined buy and sell targets will generally offer excellent opportunities to augment portfolio returns. Keep in mind, however, that this is only a short term investment strategy to take advantage of the present excessive share price volatility. |
