The Stock Market’s One Simple Truth
Today’s youth loves luxury. They are bad mannered, despise all authority, show no respect and talk when they should be working.
The youngsters do not rise from their seats when elderly people enter, they go against their parents, chat in company, gobble down their food and tyrannize their teachers.
This quote, while it has nothing to do with investing, is extremely relevant when it comes to the investing world.
I know it’s a little abstract, but bear with me.
It’s an investing must-know that I am about to explain, and it can be summed up basically by this quote.
History repeats itself.
I’m sure most of you would agree that this quote could have been made at any point in the last decade or so on the state of the youth in our country. However, this quote is from Greek philosopher Socrates, and it’s dated 400 B.C.
More than 2,000 years later, and the quote still seems to fit perfectly the youth of today.
How does this happen? It’s because of a logic most investors tend to ignore — history repeats.
Despite how often you may hear “it’s different this time,” it’s more than likely not. Like in 2007 when investors simply couldn’t imagine stock prices tumbling lower after ripping higher since the dot-com bubble collapsed — they didn’t learn from their previous mistake.
It may not have happened yet, but this market bubble will end up the same as the last bubble and the bubble before that. Understanding this simple truth led me to design a foolproof calendar that can help grow a $10,000 portfolio into more than $1 million in just 10 years.
Let me explain…
Learning From the Past
It started after my colleague JL Yastine shared a calendar that has been circulated on Wall Street for more than a century. One that has predicted nearly every major boom and bust since 1905.
This uncanny accuracy led JL and me to revisit trends that repeat themselves … but on a shorter, more actionable time frame.
We ended up identifying what we call “prime seasons” — times for each specific sector that were historically strong, or repeated year after year.
For example, take the materials sector, tracked as Materials Select Sector SPDR ETF (NYSE Arca: XLB), which is composed of stocks that operate in areas including chemicals, paper and forest products, construction materials, etc. Glancing over its price chart, you wouldn’t assume it had any relevant ideal times to buy or sell shares. It had its ups and downs, mostly up, and ended its 10-year run up a solid 58%.
But, simply by using these “prime seasons,” you would have generated more than double the return — 131% — or about 13% a year, versus the 5.8% a year by buying and holding.
Once again, history repeats itself.
From a distance, the stock market may appear noisy, with prices changing daily for no particular rhyme or reason. But when you’re able to single out repeating “prime seasons,” you can differentiate between the noise and where prices are really headed during the next few months.
You may wonder how we are able to grow a $10,000 investment into more than $1 million just by using this simple calendar — well, I’ll tell you.
Taking Stock in Prime Seasons
As you may have guessed, we are not just using a sector exchange-traded fund (ETF) to achieve this kind of realized return. While sector ETFs did beat the market with ease in our research, we believed there were possibly even greater returns to be had.
So I developed a momentum indicator to handpick the best stock from each ETF — the stock with the most upside potential. This momentum indicator tells me exactly when to enter and exit these “prime seasons.”
By following the new calendar we developed via the identified “prime seasons,” and by following my momentum indicator to identify individual stock recommendations, we hit upon an average annual return of more than 60% for the past decade.
The end result is Prime Profits Alert. To learn more about how you can join now, click here.
I issued our first alert last week and have a few more on my radar that could go out any day now.
Our goal of creating a more actionable, greater return calendar was completed — and now we can share our results with you.
Editor, Prime Profits Alert