It's all doom and gloom in the market at the moment.
The Aussie dollar is plunging.
Iron ore has dropped to its lowest price in more than five years.
Geopolitical tensions are playing on the market's sentiment.
And, to top all that off, it seems that investors' worst fears are about to become a reality. As each day passes, a correction is becoming more and more likely.
Indeed, we're already more than halfway there. The benchmark S&P/ASX 200 (INDEXASX: XJO) is already down 6.7% since early last month – it only needs to fall another 3.3% and we'll be there.
Who knows, that could even happen by early next week!
And there's no escaping from it either. The 'safe' and high-yielding stocks that investors have for so long turned to are actually the ones leading the downwards charge.
Each of the big four banks have already entered a "technical correction" while the nation's biggest miners, as well as Telstra Corporation Ltd (ASX: TLS), Woolworths Limited (ASX: WOW) and Wesfarmers Ltd (ASX: WES) have also fallen heavily.
Is bad about to get worse?
Those hoping for some sort of reprieve might want to think again. Despite how far the market has already dropped, many analysts believe there is even more pain in store.
In my opinion, the big banks still present as the danger. Although they have already had billions of dollars wiped from their value, I'm still convinced they're overpriced. Couple that with the falling Aussie dollar and I think they could still fall further from today's prices.
Given the weighting that the major banks have on the overall ASX 200 Index, further falls could definitely drag the market into correction territory.
Referring to the situation currently playing out, IG market strategist Evan Lucas said: "I'm very, very nervous about the Aussie market at the moment."
And he's not the only one. The vulnerability in the economy certainly has the market on its toes. While many investors are selling their shares in a state of panic, others are stocking up on gold, which is considered to be a safe haven in times of uncertainty.
Here's how you can profit
As much as I hate to watch my portfolio fall in value, I wouldn't necessarily say that I share Mr Lucas' stance.
In fact, I'd say I'm more excited than I am nervous! Here's why…
For a while now, I've become more reluctant to buy shares. That's not because I was fearing a correction, but because it was becoming harder to find quality companies trading at reasonable prices.
Now, however, more bargains are presenting themselves, and I plan on taking full advantage.
After all, the best time to buy shares is when they are cheap!
That's not to say they won't fall any further over the coming weeks, or even months. But I know for a fact that, over the long term, the market will only go in one direction. Up.
In fact, quite a few of the stocks that I've been watching for a while now have already started looking much more appealing. Greencross Limited (ASX: GXL), for example, is trading roughly 13% lower while Collection House Limited (ASX: CLH), which I already own, has retreated nearly 10%.
