A pullback is around 5% down, a correction is 10% or more. The host uses the sleep test to check if your portfolio size keeps you up at night, recommends keeping cash ready to buy dips, and suggests a tiered buying strategy: buy 25% at a 5% drop, another 25% at 10%, using moving averages and limit orders to avoid catching a falling knife.
All right, family, let's talk about what's really going on in the market right now. It's pulling back, people are panicking, your portfolio might be red, you're seeing headlines talking about crashes and corrections and bear markets. And you know what, it's easy to feel a little fear start to creep in, right? So here's the thing you got to understand: there's a separation between the people who build wealth from the people who lose it, and it's really how you respond during corrections. So in this video, I'm breaking down what is really happening, how to play it smart, and the exact mindset and strategy that I use when the markets dip. Before we jump in, quick reminder, this is not financial advice. I'm sharing what's working for me and I'm learning along the way. Also, do your own research before investing your money. Now, if you do want more videos like this on building your health and wealth, make sure you hit that subscribe button and turn on your notifications so you don't miss the next one. And please hit that like button for me. It helps my videos, it helps the channel, it helps YouTube push my videos out to people who need to hear them. So I appreciate that. All right, let's talk through what's really happening, and first let's define what it even is. Now, a pullback is usually 5% of a drop. A correction is 10% or more. We haven't got a correction, first of all, and corrections, they're normal. They've always been part of healthy markets. Every bull run needs a reset to shake out the weak hands. All right, so, uh, this is to share that if we do get a correction, which is 10%, You know, this is how you're going to handle it. But right now we're not even there. But if you zoom out, every correction that you've ever seen was followed by a recovery, and that's the cycle of money. So instead of reacting emotionally, you've got to start thinking like the institutions. They prepare for these type of moments before they happen. They love the corrections. They even love the recessions. That's how money is made. So I want to get your mind right about this, first of all, okay? Because some people, when the market starts to drop, they run into the news and to Twitter and they looking for answers. And, and you know what, you need to just turn the noise off. Your job right now is not to chase panic, but it's to stay calm and think clearly. This is why you need a game plan. Here's the test that I use. I call it the sleep test. If you can't sleep at night because your portfolio is down, you're probably overleveraged or overinvested. And that means your position size is too heavy for for your peace of mind. At the end of the day, you need a peace of mind. So you need to be able to manage your portfolio in a way that gives you a peace of mind, and you need to look a little bit further out. Second of all, I know we love assets, but don't underestimate the power of having a little cash on the side. It's not weakness, it's strategy. It's your dry powder. You don't have to be 100% invested all the time, and having cash ready gives you options when everybody else is frozen in fear. Now, I want to talk to you about how to start positioning yourself like a real investor. You don't have to buy every dip. You buy quality. Only buy companies that drop because the whole market dipped, not because something's wrong with the company itself. When I'm choosing what to buy, I use something simple called the WATCH method. That's W-A-T-C-H. You can even write that down real quick, and it's my checklist. W stands for winning business model. That means the company has a strong brand, loyal customers, and it dominates its space, like Apple or Microsoft. And then you have A, which is AI or tech enabler. These are companies that are driving the future, not falling behind, like your NVIDIA or other innovators in AI and cloud. Then you have T, which is track record of earnings. You want companies that's consistently making profits, not just hype or promises, making profits. They make money. C, by the way, stands for cash flow positive. They're not just selling dreams, they're actually generating money. All right. And then H is high growth potential. Even though they're solid today, they still have room to grow over the next decade. And it's good to get these long-term plays under your belt. Now, if you want something more diversified, then you can do ETFs like your VOO, your VTI, your SCHD. You can hold a mix of these kind of companies. And that's a great option too. As a matter of fact, some days I think people should just only buy ETFs because they're the safe move. And honestly, sometimes people don't have enough ETFs in their portfolios, and I think that's the foundation of making sure you don't experience too much volatility in your portfolio. But here's the key: have your buy list ready before the dips happen, not during. Remember, you need a game plan, you need to prepare, and that's what separates panic from preparation. Now, I need to end with helping you to understand the entry strategy. So we got to talk about how to enter without catching a falling knife. You don't need to time the exact bottom. A lot of people are trying to do that, and that's how most people lose. Instead, use a simple plan. Like, for example, if the stock you love drops 5%, maybe you buy 25%. If it drops 10%, maybe you buy another 25%. And if it hits 15% or 20%, then you add some more to that, right? That's called dollar-cost averaging into the dip, okay? You can also dollar-cost average up, especially again, if you team long-term with the stock that you're buying. And if you're more technical, you can watch the 200-day 100-day moving average. That line often acts as a floor for strong companies, and when price bounces off that support zone, it's usually a smart place to scale in. Now, for me, I already have limit orders set. As a matter of fact, when we had the crash not too long ago with crypto, there was a long wick that went down, and I set limit orders going down that wick and even under the wick. So I'm already in position, but I want you to get in position too. All right, now I hope that this gave you some clarity on how you can navigate a market correction the right way.. And again, this ain't really no market correction, but if you do have one, you need to know what to do. Remember, none of this is financial advice. I'm just sharing what I've learned and my experience and research. Always do your own homework before you invest. Investing comes with risk and you can lose everything. So talk to your financial advisor. And if this did help you out, then hit that like button so YouTube keeps showing you these videos and make sure you subscribe for more breakdowns on health, wealth, and smart investing. And hey, I want to hear from you in the comments. What's one stock, ETF, or crypto that you've got your eye on? Drop it below. I love seeing what you're watching in the market. And if you want to go deeper, not just protecting your money, but learning how to build it, multiply it, and keep your health in order while you do it, because you know we got to get our health together too, right? And that's what I help people do inside my 90-Day Health and Wealth Challenge. You can check the link in the description to join the community. We talk investing mindset and the habits that create real freedom. All right, stay wise, stay calm, and keep building wealth the right way. I'll see you in the next video. Matter of fact, check out the next video so you can keep learning and growing.
