The Final Run Up; Or, Our Lips Aren’t Sealed
Domo Arigato Great Stuff Roboto Welcome to Wednesday, Great Ones! Hopefully, by now, none of you...
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Tag: Investing Strategy
Charles’ MUST-READ: Down Days Haven’t Been Outlawed on Wall Street!
(3-minute read) We’ve seen plenty of day-to-day swings recently. And what I’m sharing with you today can make the difference on how you react when the stock market plunges or starts a long trek lower…
Should You Buy This Dip?
Now, if you’re an investor that uses exchange-traded funds (ETFs) tied to an index like the S&P 500, you’ve undoubtedly been conditioned to buy the dip. But before you do that this time, know this: Rising interest rates could lead to a risky new phase in the stock market. It’s one that will look nothing like the past decade … and will curtail recent stellar returns going forward … especially for buy-and-hold index investors. Here’s why and how rising interest rates come into play…
Your Investment Expectations Could Be a Trap
If you extend the stock market’s average return back 20 years, for example, it falls to 9.8%. That’s consistent with the long-term average over the last 200 years. To anyone whose stock trading experience spans the 12 years since the Great Financial Crisis (GFC), that may seem disappointingly low. But those 12 years are exceptional. Only one of them produced a negative return — 2018. Even then, the Federal Reserve Chairman Jay Powell-induced crash in the fourth quarter of that year immediately reversed in 2019, when the market rocketed 31.5%.Over the last two centuries, on the other hand, one out of every four years produces a negative return. That raises an important question for all investors. On what are your expectations for the next decade based? Could they be leading you into a trap?
The Formula for Limiting Losses
I was great at buying the right stocks but was still a terrible investor. Maybe it’s the same for you? For example, in October 2016, I bought Advanced Micro Devices (Nasdaq: AMD). I looked like a genius. AMD gained over 1,000% since I bought into the stock. But I missed all of those gains! So much for looking like a genius. What happened? Simply put: I trusted my gut. And it cost me a lot of lost gains. So how do we stop that from happening to you?
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