If you failed to foresee the market collapse in 2008, then it’s not too late to adjust your methods to handle the upcoming decade of frequent fluctuations in both directions. We all prefer to be lazy rather than having to constantly adapt to changing conditions. There are also times when it is important to do very little trading.
You will discover who the greatest traders are when the going gets tough in the bear markets, which inevitably will happen and when all the amateurs climb over each other after a significant gain in the market. By traders we do not mean high frequency traders, day traders, or momentum traders. We mean real investors that do serious market and sector timing. They can scan the market and find undervalued assets and move in decisively. There is an old saying from that; when the wind is blowing hard even turkeys fly, but when there is no wind only eagles can fly.
Gold and silver are the latest buy-and-hold darlings, until gold loses perhaps 40-50% of its value while silver ends up plummeting at least 60 or 70% over the next couple of years. One of the biggest downfalls of being too greedy is holding onto positions after they have already become far too popular and then giving back most of of their value.
Sometimes we’ll have lengthy bull markets in some assets which will make it seem that buying and holding still works as long as you own the right assets, like from 1982 to 2000. In 1982 a little over 10% of Americans’ savings were invested in stocks. In contrast, by the early 2000 that amount had increased 500% into equity mutual funds and single stocks.
Thus, it is not about buy and hold or diversification – rather, it’s all about watching the herd and observing the irrational exuberance and decisively buy ETFs or other assets that are undervalued.
Ignore the media gurus and the hype. Stay focused and be decisive. During euphoria stages of market, start moving into US Treasuries like TLT for handsome capital gains and TIP for a more conservative gain. During bear markets and extreme fear start buying into high quality equity ETFs such as SPY, QQQ for US and EFA, EEM and XIU for all other markets.
As our subscribers you will be ahead of the game in these different eras. It is our goal to make those tough decisions that investors cannot bear to make.