Editor’s Note: Ian King here! This week, it’s my pleasure to introduce a special guest: my colleague and friend Keith Kaplan, CEO of TradeSmith. TradeSmith’s investment research tools are showing remarkable win rates as high as 98.9% (which is why we use them in some of my financial services).
Today, Keith is going to tell you a bit about TradeSmith’s market-tracking algorithms, and how they can pinpoint the right time to sell your stocks amidst a volatile market. And tomorrow, June 18 at 1 p.m. ET, he’ll join me in a special presentation: “The 10X Profit Accelerator Summit.”
There he’ll share what his team believes is “the most important number in finance…” And how this number could improve your investment profits up to 10-fold.
But first, let’s dive into how Keith learned an invaluable lesson about when to sell your stocks…
How to Time Your Sells When Markets Are Soaring
By Keith Kaplan, CEO, TradeSmith
In February 2020, as I read about a handful of U.S. coronavirus cases popping up for the first time, I was gearing up for a week of multiple trips and a long time away from home.
Then, around 7 p.m. on Thursday, February 27, I got this big, bearish alert from TradeSmith’s proprietary market-tracking algorithms.
It basically said: “Run for the hills and sell your stocks.”
Every major market triggered a rare “bear market” signal.
I had no idea at the time that those few cases would go on to become the global pandemic COVID-19. Nor did I know that it would basically shut down the world.
And I certainly didn’t know markets would crash more than 30% in less than a month.
But I didn’t have to. Because I knew to trust our system.
So the very next day, I sold nearly all my stocks.
Over the weekend, a quick stop into Target with my family gave us an early glimpse into the world of panic buying and hoarding. We noticed a woman with a cart FULL of nothing but Clorox wipes.
Clearly, there was panic in the air, and we were just starting to see and feel it for the first time.
On Monday, I flew to Florida to meet with a group of 50 of my peers where each of us would pitch our best and biggest investment ideas.
Person after person was pitching greedy parts of the market that they believed were ready to soar. My turn to present came Tuesday morning, March 3…
I got up on stage and said: “I sold almost all my stocks on Friday.”
I urged people to be safe with their investments and consider warning their subscribers that a bear market was rapidly approaching — likely the fastest in history.
I told them it would catch everyone by surprise and destroy years of wealth-building.
I showed them the alerts I received and then how accurate these types of alerts have been over the last 20 years.
And … they laughed at me. Not a single person in the room wanted to hear what I had to say. None of them seemed to heed my warning.
That didn’t sway me. In fact, it only made me more confident I was right. Market crashes never happen when everyone’s expecting them to.
Plus, the alerts I showed you earlier are based on proprietary algorithms we created at TradeSmith years ago. We routinely test them against current market conditions and update them accordingly.
They’re based on momentum and short- and long-term trends. And all you have to see is the track record to understand why I was so confident in my call.
Here are the five drawdowns prior to the COVID-19 crash … along with the dates TradeSmith’s software would have warned of a bear market.
In 2020, my personal portfolio was saved a huge loss thanks to our alert system. Because I’d already cashed out on February 28, I got to “skip” the bear market.
And, just a month later, our indicators did it again, alerting me to a bullish set up in the markets.
By this time, CNN’s Fear and Greed Index had plummeted to extreme fear, and people were nervous.
Heck, I was nervous.
But again, I trusted the math and these signals, and I took action. I started gobbling up stocks that had big pullbacks and were noted as “healthy” in our system.
Boy, was that the right decision.
Now, I want to be clear about something.
The sudden surge of volatility in February 2020 caused the bear market signal to come much faster than usual. You’ll notice that in the previous signals, it didn’t call the top of each market.
It’s not designed to. Tuning our algorithm to sell the top and buy the bottom would make it so sensitive, you’d be getting bear market and bull market signals constantly.
But what we did design it to do was save you from the worst periods of bear markets … and put you in good position to benefit from a sustained bull market.
Take this chart, for example. It shows you when our system gave an official bear market signal, and bull market signal, back in 2022-2023.
Our algorithm threw a yellow “caution” signal in late February 2022, and then again in early May before giving the red “bear market” signal on May 9, 2022.
If you followed it, you would’ve avoided an additional 11% of losses before the bear market bottom later that year.
Then, the S&P 500 triggered our “bull market” signal eight months later on January 6, 2023. From then until now, stocks have surged more than 36% higher.
If you followed these signals and sold everything when the S&P triggered its “bear market” signal, you skipped the depths of the bear … and bought back in when prices were 2% cheaper from where you sold.
That’s the power of TradeSmith — helping make your investing life simpler, safer and more profitable.
Warm regards,
Keith Kaplan
CEO, TradeSmith
P.S. — Ian here! Now that you know a bit about Keith and the power of TradeSmith’s investing tools, please join us tomorrow at 1 p.m. ET for “The 10X Profit Accelerator Summit.”
Through their research and backtesting, Keith and his team discovered how one simple change to your investing strategy could have improved investors’ gains from:
- A $1.4M loss to a $360,000 profit.
- A $22,000 profit to a $141,000 gain.
- A gain of $22,720 to $141,480 (a 6X increase!)
This one change could not only reduce your risk, but even better — it could increase your returns even up to 10X.
Just sign up here for the free event!