I was near Albany, NY when the flash crash of August 24, 2015 hit. I was on my way out to a retreat with friends in the White Mountains of New Hampshire. The stock market was down 5.3% the first few days after the open that day.
Buying stocks quickly that day worked for me as I had put 10 good til cancel limit orders in before I left for vacation the day before because the market had already become jittery. All ten trades hit as over 765 stocks in the Russell 3000 were down more than 10%. I got stocks like Google (GOOG), Lockheed Martin (LMT) and Intel (INTC).
There is certainly a strong argument for keeping open limit orders on our favorite stocks in case of such corrections. However, buying a few ETFs is probably the easiest thing to do on a correlated correction. We can always sell off pieces of the ETFs and replace with stocks when we are ready.
Here are some ETFs I have open good til'cancel limit orders in for, the reasons why and the price levels I've set. Remember, I'm 25% in cash because of the overvaluation of the markets.To read more, a subscription is needed: Click here to subscribe