How are you setting yourself up for the win?
As we enter the 11th year of the current bull market, it’s key to remember that what goes up, can come down – rather rapidly. The 9.2% drop in the S&P500 in December 2018, is a stark warning that when the winds shift it can be too rapidly to properly protect yourself. That is why it is key to have a time-proven plan – one that can withstand financial storms. You don’t want to discover you’ve built your fiscal health with straw, as most people did during the Great Recession, when over 10 million homes were lost and the Dow dropped 55%.
So, What’s Your Exit Strategy?
How are you setting yourself up for the win?
Real Estate
Real estate prices are higher than ever, and unaffordable in many cities. This is not a buy and flip environment. And it is definitely not the greatest time to consider buying a new home, even with the massive tax advantages that Americans receive. One of the worst mistakes you can ever make is to buy high in real estate. It can ruin your life for a decade or more. So, if you’re considering buying or selling real estate, you want to learn the most important key to a successful investment. Click to access that blog.
Nest Egg
Are you suffering from buy high, sell low mentality ? Are you tempted to buy stocks now when stocks are back to an all-time high (afraid you’ll miss the party if you don’t)? Did you sell everything in 2009, during the Great Recession? If so, you are letting stomach acid and euphoria – emotions – rule your investing strategy.
There is a time-proven, easy system that earned gains in the last two recessions and has outperformed the bull markets in between. Yet most money managers don’t use this system. Why? The status quo just isn’t set up to incentivize that. There are some brokerages moving in this direction. However, they will attempt to sell you options trading and other high-risk investments to improve their profitability. That is why it is important to be the boss of your money, even if you have someone on staff to “manage” it. This is much easier than you might think, which is why I encourage you to learn the ABCs of Money that we all should have received in high school now.
The basics of a successful nest egg (401K, IRA, HSA, college fund) system are:
- Always keep a percentage equal to your age safe,
- Overweight safe in troubled or perilous times (i.e. now),
- Know what’s safe in a world where stocks and bonds are in a bubble and money market funds have redemption gates and liquidity fees
- Diversify your at-risk portion into 10 funds, small, medium, large, value, growth and four hot industries, and,
- Rebalance at least once a year.
Annual rebalancing is one of the most important things that you can do to promote fiscal health. Buy and Hope has been riding the Wall Street rollercoaster, losing more than half in the last two recessions and barely crawling back to even before the next economic storm strikes. Annual rebalancing is a buy low, sell high plan on auto-pilot for your nest egg. Learn more in this blog.
If you need help understanding what you own, call 310-430-2397 or email info@NataliePace.com to learn more about receiving an unbiased 2nd opinion from me.
Trading
Trading stocks in the 11th year of the bull market, when stocks are at an all-time high, is like surfing in a hurricane. If you can’t surf ankle slappers, then you shouldn’t be surfing storms. There are times when any yahoo can pick a stock and make money, and other times when even professionals are hard pressed to eke out gains. The wind is in your face right now. Be careful.
Successful trading in individual stocks requires employing my 3-Ingredient Recipe for Cooking Up Profits, which includes using the Stock Report Card and 4 Questions for Picking a Winner. These strategies are outlined in my first book Put Your Money Where Your Heart Is, and taught at my Investor Educational Retreats. Call 310-430-2397 to learn more now.
In today’s world, with Tariffs, Trade Wars, Volatility, Astronomical Debt and Political Tensions, buying low and selling high require considering 3 factors:
- What is the company capable of?
- What will the industry do?
- How will the macro economy effect the company?
Read more about these factors in my recent blogs on Tesla, cannabis, Zoom, Uber, Boeing, Lyft and Wells Fargo.
On June 19, 2019, the Federal Reserve Board is scheduled to meet, largely to determine whether or not to cut the interest rate. While some will applaud a cut because companies can continue to borrow money very cheaply, others will understand the risk is that Interest Rates Create Bubbles and the over-leverage party is ready to pop. Additionally, a rate cut signals economic weakness – which is never a good sign. In short, the macro economy could be a severe drag on any high performance of a single stock. Even Apple lost value during the Great Recession, when it launched the Smart Phone that changed our lives and disrupted the phone industry.Additionally, it’s important to remember that Financial Engineering is Not Real Growth. Click to read that blog.
The Bottom Line
If you wait for the headlines that the economy is in trouble, it will be too late to protect yourself. The December drop (which was the worst December since the Great Depression) is a warning shot that now is the time to be sure that your exit strategy is based upon a time-proven system and not Buy and Hope.
If you’d like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you’ll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by June 30, 2019 to receive the lowest price and a complimentary 50-minute private prosperity coaching session (value $300).
Natalie Wynne Pace is the co-creator of the Earth Gratitude project and the author of the Amazon bestsellers The Gratitude Game, The ABCs of Money and Put Your Money Where Your Heart Is (aka You Vs. Wall Street). She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical).