By Matt McCallJun 18, 2020
The Dow lost 170 points yesterday. Even as markets have been largely positive this week, the volatility has continued and investors are staying vigilant in case more trouble is ahead.
And Keith Kaplan has a tool to help.
Today I’m happy to bring to you the second part of Keith’s amazing story.
If you missed yesterday’s essay, Keith uses a revolutionary tool to get in front of major market moves – and the tool has been spot-on about this recent market… as well as every major bear market AND bull market going back over the last two decades.
Today he describes how this tool not only helps protect him from the market downside but signals him when to get back into the market to maximize the gains.
Keith and I are conducting a joint presentation on June 23 at 4 p.m. ET where we will show you how thousands of ordinary folks use this revolutionary tool with great success. I urge you to join us.
Yesterday, I told you about when I got out of the markets in February. I was called crazy and dumb and was told there’s nothing to panic over.
A month after I went to cash, the Dow entered bear market territory and the S&P 500 dropped 25%.
Suddenly my decision didn’t seem so crazy anymore.
Like I told you yesterday, I’m no guru or financial mastermind. I don’t have a crystal ball telling me what to buy and sell. I’m a regular guy, just like you, who uses technology as an aid for timing the markets.
Not too long after the Dow’s historic plunge, I got another signal telling me to get back into the markets.
I was nervous and yes, again, people thought I was crazy.
60% of the time when the Dow drops into bear territory, it will continue to drop another 10%.
Knowing this, why would I even consider getting back into the markets? It’s like betting against the house in a casino.
Well, with technology on my side, I’ve been able to give myself my own house advantage.
Each time I’ve seen this signal before, the markets have gone up, but this time the signal triggered just after the markets had one of their worst months in history.
I felt lucky to have avoided the crash and wanted to once again trust the signal, even if my emotions said otherwise (more on that tomorrow…). So, I decided to cautiously get out of cash and see what might happen if I nabbed some stocks at a discount.
In April, the S&P 500 gained 13%, its third best monthly performance since 1950. The Nasdaq gained about 15%. The Dow even gained 11% back.
And even though WTI crude oil went negative for the first time in history, the S&P 500 Energy Index had its best monthly performance (almost a 30% gain) since it started in 1989. In fact, all the major sectors saw gains in April.
I entered the markets again starting on March 27. That means I was poised and ready to snatch up these historic April moves. Some of my stocks have really taken off since then.
Take Visa (V), for example. I took a position in Visa shortly after I saw the positive signal for the overall markets. I entered Visa on March 31. Since that time, Visa reached a recent high of nearly 25% — only $10 shy of its all-time high set on Feb. 19.
Another stock I entered was United Airlines (UAL). A forward-looking indicator that I follow was saying UAL was bullish. Because I was comfortable with the amount of risk in this stock, I went ahead and bought some shares. I entered the position on April 3. As of June 8 (the most recent high), UAL had gained 112%.
One other stock I entered is Royal Caribbean (RCL). That same forward-looking signal I follow said RCL is bullish, and a billionaire investor holds the stock, too. I entered the position, again, on April 3. From there, RCL has moved up as much as an astounding 207% on June 8.
Of course, I entered other stocks, too. Some of them were losers. I took a small loss of 3% on Hershey and a 10% loss on Virgin Galactic. Not all stocks are going to be winners. Again, I don’t have a crystal ball to predict each and every stock that I enter.
What I do have is the right mindset for investing.
There’s no such thing as a perfectly rational investor. When’s the last time you conducted a thorough cost-benefit analysis for every possible nuance of a trade?
Your perception (and everyone’s!) is flawed in ways that cannot easily be controlled. We have subconscious biases that can impact our portfolios and even prevent us from being successful investors.
Then there’s the stuff that we’re aware of.
Have you ever gotten upset and doubled down on a losing stock, hoping to get back to breakeven?
Have you ever bought a stock only because you liked one of their products (like AAPL just because you own an iPhone)?
Identifying our conscious and unconscious failings is absolutely critical. Tomorrow, I’ll show you how you can overcome the biggest risk to your own investing success — you.
Until next time,
Click here to listen to Matt McCall’s MoneyLine podcast! This week, Matt talks about the recent market volatility. Why did stocks go down this week? Should you be panicking and chasing stocks like Nikola (NKLA)? Matt doesn’t think so. This week, he’ll guide you through what’s going on in the stock market discuss various investment opportunities in Transportation 2.0 and COVID-19 vaccines. He’ll also answer the classic question – gold, silver, or crypto?
You can subscribe to this podcast on iTunes, Stitcher, Spotify, or wherever you listen to podcasts.
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