Know thy strategy!

Gold is the name of the game at the moment. The precious metal is absolutely flying and touched US$970 an ounce yesterday. Importantly for South African gold shares the rand didn't strengthen against the US dollar as has been happening in the past.

This boosted the South African gold index in excess of 6% on Tuesday. For the rest it was something of a slaughter house:

All share - Down 2.93%
Top 40 - Down 2.97%
Industrial - Down 3.41%
Financial - Down 5.52%

Ouch!

On top of that the Dow has continued its slide downward losing another 297 points to trade at 7552. I had a target of around 6800 as my low on this index before a possible bounce.

On Bloomberg I see there is an article saying that GM and Chrysler are seeking another$21.6 Billion in aid and are planning to knock another 50000 jobs off of their workforce. That will be a huge blow to Obama and his turnaround / bailout initiatives.

Know thy strategy!
For those investors who keep looking at their portfolios and just see red: I know it sounds cliched but you have to know what your strategy is and stick to it.

If your belief is that the Dow is going to 6800 and the market doesn't offer much value then stick to that conviction and start building up funds to take advantage of the market... Don't look at the nest-egg you've built up and see some cash to blow on a car or some other luxury.

In the same way if you believe we are already in value territory and want to carry on buying quality shares yielding a nice dividend ... then stick to it!

Don't do what I did and rush off converting quality shares into hopeful punts in the hope that I would make some small trading gains. The strategy sounds good in your head, until you realise that with so much volatility in the market you start trading your way backwards on a strategy that is supposed to help you take advantage of down markets...

Best of luck.