Learn from market sell offs

Sell offs in the market are never fun unless you are short the market. However we can learn valuable lessons from these events. On days where there is almost no place to hide in a sell off you may find asset classes which are traditionally non or negatively correlated moving in the same direction. This might tell you that the selling action is systemic in nature or that your portfolio is simply experiencing the effects of what we call the reversion to the mean. Look carefully in days of major market pullbacks and you might find some stocks that are actually flat or moving positive. Look at the data from today and discover if there are any stocks or ETFs that emerged from this fire as cool as can be. This crash test concept can be very helpful when you are ready to select new stocks to a portfolio. You might want to move holdings that are strong in sell off conditions like today to the top of your shopping list.