I don’t mean we’ll see a market top like we saw in February. That decline could look like nothing in comparison to a true Melt Down. When the tech bubble burst, the S&P 500 fell by more than 50%. But what was even worse was that the decline lasted nearly three years . There was no quick fall and rebound like we saw this year. And in a true Melt Down, the market will take everyone down over what could be years, not weeks. Worst of all, the Nasdaq – the real heart of the dot-com era Melt Up – fell nearly 80% over a similar time frame. It took 15 years to recover those losses. The best way for investors to protect themselves in the coming Melt Down is to have a plan for when things go wrong. If you’re investing today, you must follow your trailing stops . You can’t have any reservations about selling anything you own. It only takes a sliver of doubt when times get tough for you to blow it. If you come up with reasons why you shouldn’t sell, even though you hit a stop, it’ll absolutely crush your portfolio. You will risk losing everything – which is what happens to most people in a Melt Down. In a true Melt Down, where the overall market falls 50% or more, individual stocks can easily fall 80% or 90%. And remember, a stock that’s down 80% needs to rise 400% just to get back to even. If it’s down 90%, that rises to 900%. Simply put, if you make the mistake of not following your stops when this all unwinds, you might never recover that money.
Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. Pull quote. Dr. Steve Sjuggerud predicted the rise of gold in 2003, the top of the dot-com bubble in 2000, and the bottom of the Great Recession in 2009. Now, this former hedge-fund manager says a mania will hit the U.S. stock market any day now... one that’ll take most people by surprise. Don’t get left behind – get the details here. You must have a plan for all of your positions when times get tough. When the tide starts going out, and your trailing stops are hit, you have to sell. The only way investors can safely ride stocks higher is if we have a plan for when they sink lower... because they will. For now, the tide is coming in. We want to ride it. Our best move today is to put more money to work so we can profit from what’s happening. That means buying a basket of exciting stocks... the kinds of stocks that investors will surely bid to astronomical prices in a Melt Up.
American Consequences
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