Step up to the plate and don't panic
IF YOU were a baseball fan you would know what ''fat pitch'' means. A fat pitch is when a baseball pitch appears so ''fat'' that you can't miss it and you can knock it out of the park. There is as well a fat pitch approach to investment.
In the stock market investors constantly take swings at stocks that should be left alone because they put themselves in accordance with pressure. The pressure comes from wanting to make money more quickly than is likely. It comes from impatience and maybe even a bit of delusion, encouraged at times by the industry itself, that there is money to be made and everyone is hitting fat pitches and all you have to do is step up to bat.
But the truth is that in the stock market there is no three-strikes rule and no pressure other than the pressure you put on yourself. In this market you can relax, especially for those of you already in term deposits wondering whether to get back in, you don't have to do anything, you can stand in the stock market and watch pitch afterwards pitch afterwards pitch go by without hitting anything, just waiting for the fat pitch.
Wait as long as you like. It will come. Many colleagues sit in this industry for just that. Patiently awaiting their opportunities. It is an environment full of them. The worst thing you can do, especially in this market, is need to hit.
How do you relax?
So how do you relax? It's all about expectations and adopting realistic goals. This market is very unlikely to change your life at this stage or make you rich quick, and your best bet is probably to wind your expectations back completely and plan a life without any stock market income at all, and from that base expectation anything you make in the stock market becomes a bonus in other words than a necessity. Nevertheless you're a batsmen without a three-strikes rule. But wait and watch.
Having identified a fat pitch you have to time when to hit it. Time the change in trend. You will need a combination of technical and fundamental analysis. Use every tool you can get. The value guys on their own will get the stocks right and the timing wrong. The technical guys will get the timing right and the stocks wrong. You need both and the flat spot in this market is the perfect time to learn.
Look at the dogs. Those ''rubbish stocks'' are going to be opportunities once the glass becomes half full again. Fat pitch stocks are right in front of you waiting for the market. Look for good stocks with temporary problems. The ASX, Computershare, Macquarie and Iress come to mind.