All investors should be long-term investors and your long-term odds when investing in the stock market are exceptional. Look at how the S&P 500 and the Nasdaq and the Nasdaq-100 have performed over long periods of time. The results are terrific and amazingly consistent.
Investing odds are very different than gambling odds. The odds are heavily tilted in favor of the casino when you gamble. The house does always win. You can get lucky in the short-term but if you play long enough, the house will win.
It is the exact opposite with stock market investing. The long-term odds are totally in the investors favor. But short-term results will be highly volatile and erratic. Even though you can expect long-term gains of 10% per year, bear markets periodically lead to losses of 30%, 40% and even 50% in short time frames.
Other than picking the best large cap index funds for your investments, the only thing left to do is to deal with inevitable bear market collapses. Every six to seven years on average the stock market will drop by roughly 40% over a time period of roughly eleven months.
All of the difficulties that investors face can be traced back to stock market meltdowns. Your success as an investor will come down to how you deal with market crashes.
Some people avoid stocks altogether and end up generating terrible returns on their investments.
Some people follow the industry advice of asset allocation and spread their investments across many different assets and asset classes (bonds, small cap stocks, international stocks, real estate, commodities, etc.). The “asset allocators” end up getting only about 6.5% to 7.0% annual investment returns AND they still get crushed in bear market.
Some people put all their money in large cap index funds like the ones we recommend and simply follow the Buy & Hold approach. They figure out a way to deal with watching their life savings get cut in half periodically knowing that the market will rebound eventually. This approach works but we created an approach that gives the best of both worlds – high long-term gains with the best large cap index funds AND avoiding most of the pain and suffering of bear markets.
While it is not possible to perfectly avoid bear market crashes, you can tilt the odds in your favor to both increase your investment returns and avoid the pain and suffering of stock market collapses.
ROGER FEDERER
I came across this story about Roger Federer, the great tennis player, and his statistics mirror what we do to beat bear markets with our Market Signals investment system.
Roger Federer won 80% of his tennis matches over his long professional career. When the tennis experts analyzed his winning matches, they found that he only won 54% of the points in those matches. That was surprising to me. I would have guessed that he won closer to 70% of the points in the matches that he won.
Federer had a Hall of Fame tennis career by only winning slightly more points than his opponents. He won just enough points to get a big edge over his opponents.
The stock market is similar. When we look at how the S&P 500 does on a daily basis, the stats are similar to those of Roger Federer. The stock market posts a daily gain only 52.4% of the time. It posts a loss 46.4% of the time and it is flat 1.2% of the time.
These unexciting daily results generate long term annual gains of roughly 8% per year (not including dividends). This shows us that the daily ups and downs don’t matter much. It is only the long-term trends that matter in investing.
Our Market Signals Investment System uses odds and probabilities to avoid the worst of bear market crashes. It is not correct all the time, but it still beats the Buy & Hold approach by a wide margin.
Like Roger Federer, we win the important points in the match. By just being a little bit better than the market in the periodic meltdowns, we see results that are 50% better than the market over time. We don’t win every point, but we win the match.
Do you want to be a Hall of Fame investor or a mediocre investor?
Stay Disciplined My Friends.
Phil
Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.
Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.
The bull market keeps running. Both the S&P 500 and the Nasdaq are now at new all-time highs.
Between November of last year and June 15th this year, the S&P 500 and the Nasdaq (top two lines) have moved sharply higher. Both the S&P 500 and the Nasdaq are at all-time highs. Notice how the Russell 2000 (bottom line) is still in a bear market – sitting about 17% below its previous high in November of 2021. This is another reminder of why you do not want to be investing in small cap stock funds.
The market has been pleased with the most recent reports on inflation and interest rates and the economy keeps plugging along. But inflation has not been tamed just yet and a recession could still be possible. With the markets at such high valuations, any bad inflation/recession news will likely lead to a significant decline.
Our customers have posted huge gains since November of last year as we have been “all in” on stocks. The S&P 500 has gained 28% since November 1st and the Nasdaq has gained 36%. And our customers can be extremely confident knowing that our Market Signals system will move them to cash if the market declines significantly.
When you have downside protection, you can be comfortable putting 100% of your money in stocks and getting the big gains in bull markets. You can also sleep better at night.
Without an investing system like Market Signals, investors are forced to shift money to lower performing and safer assets before the bull market is over or be willing to get crushed in a bear market decline.
Stay Disciplined My Friends.
Phil
Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.
Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.
The stock market is the best place to invest if you are seeking the highest long-term investment returns. Owning the best index funds will deliver long-term, annual investment returns of roughly 10%. But it will not be a smooth ride. Because the stock market is so irrational and volatile, the stock market might see gains of 30% in one year and losses of 20% in another year.
This volatility is the source of most of the biggest investment challenges we all face.
Before the introduction of our Market Signals Investment System, there were no good solutions to this problem.
The main solution of the investment industry has been Buy & Hold – simply riding out the inevitable storms. But riding out the bear market collapses is incredibly painful, financially and emotionally.
We didn’t think that made any sense at all, so we created Market Signals – A Better Way to Invest.
With Market Signals, you get the very high investment returns of the best large cap index funds AND you get protection against the big losses that happen in bear markets. You get the best of both worlds.
Losing less in bear markets equals higher overall returns. It is simple math. But even more important than generating average annual returns of over 14%, you will sleep better knowing that your money is protected against the huge losses when the stock market crashes.
A better than average 401K investor might generate annual investment returns of 7% per year which will only produce a retirement nest egg of $574,000 at age 65 and an annual retirement income of only $40,000 per year. Using Market Signals, that same investor could end up with a retirement account of $2,000,000 at age 65 and a retirement income of $250,000 per year.
see disclosures below
The system is simple and easy to follow. We do all the work for you by using our proprietary algorithms from our hedge fund to tell you what to invest in during bull markets and bear markets and sideways markets. Market Signals is so effective that it is rapidly becoming the go-to investing solution of financial advisors.
Subscribing to Market Signals only costs $39.95 per month and it comes with a 100% satisfaction guarantee. Other less effective investing systems cost $200 or more per month. We make it affordable so that we can help as many people as possible. Learn more by Clicking Here.
It is time to get off the stock market roller coaster and saving your retirement.
Be well,
Phil
Disclaimers The Beyond Buy & Hold newsletter is published and provided for informational and entertainment purposes only. We are not advising, and will not advise you personally, concerning the nature, potential, value, or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter. Beyond Buy & Hold recommends you consult a licensed or registered professional before making any investment decision.
Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.
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