Markets fell following latest inflation data ... what can we do?

Markets fell across the boards following the new inflation data. With this, it is expected that the Fed will need to maintain their current or adopt a more aggressive stand towards inflation with interest rate hike increases.

Market performance following close as of 11May2022 (EST)

Friday's jobless data will provide the remaining data as the Fed tackles both inflation and unemployment. Together with the sale of the purchased treasuries and mortgage-backed securities (MBS), the Fed will use the latest data to chart their coming measures to contain the inflation while keeping unemployment low at bay.

Honestly, the Fed is caught between a rock and a hard place. We need to realise that this market "correction" has been delayed by the various stimulus introduced to battle the pandemic. Though there are more companies available at good discounts, the decline is far from over. We could expect some partial relief but with the market nervy, and less than favourable earnings and outlook, the market will remain volatile.

News extract:

The CPI rose 8.3% in April over last year, coming down only marginally from March's 8.5% increase. That had been the fastest rate in about 40 years. Consensus economists were expecting an 8.1% increase in April, according to Bloomberg.

Much of that deceleration came as a result of a moderation in energy prices. But excluding the volatile food and energy categories, core CPI decelerated only modestly in April compared to March. Core CPI rose by 6.2% last month over last year, following March's 6.5% increase. This was also hotter than the 6.0% rise expected.

During such time, some of us will continue to dollar cost average (DCA) for some of the companies or indices.  For me, I will be setting aside more "cash for crash" as the downturn is inevitable.  In fact, we could already be part of the recession.

For value investors, this spells "SALE TIME".  Let us do the work right out to qualify great companies, and establish their "fair value" with a built-in margin of safety.  Personally, I would look to technical indicators to guide us for our entry.  

For me, it is better to be guided by technical indicators than some price ranges (though it is needful to identify support zones).  If the price remains on a downtrend, I would prefer to buy at a potentially lower price.  Of course, the stock market is irrational and will not follow any technicals or estimates but this is the risk that we can consider for hopefully better margins.