You can skip this article if you think:
You can be a great stock picker and beat the market.
You can be a day trader and generate high returns.
You can trade options and produce above average results.
You can deploy a sector investing strategy and beat the market.
You can trade bonds to generate high returns.
You can trade commodities successfully.
You can trade cryptocurrencies successfully.
The odds of being successful at any of the above strategies in the long-term is less than 1%. Those strategies will also require a time investment of two hours per day or more.
If you choose to pursue one of these paths, good luck to you. Many people feel the need to try to be a financial wizard and expert trader. After they have tried and failed at these approaches, they are ready to hear what I will be covering in this article.
Once people can get past the dream of outwitting the market, their investing life can be simpler, and their investing results will be better and more consistent. Simple beats complex in investing. Spending less time on investing and investing the right way also wins. There are NOT too many areas in life where you can do less work and win. Take advantage of this rare situation.
In investing, you do NOT need to know about:
Fancy investing terms like P/E ratios and PEG ratios and Profit Margins and Market Share, etc.
Bonds
Commodities
Passive Real Estate Investing
Stock Options Trading
Fancy Technical Analysis and Graphs
Asset Allocation and Rebalancing
All you need to know about investing is:
Stocks beat all other asset classes in the long run
Large cap ETFs beat all other stock investments in the long run
Which large cap ETFs to invest in
Once you learn that, you are pretty much done. You can be very comfortable earning about 10% per year on your investments.
If you are okay living through stock market meltdowns and following the industry’s recommended strategy of Buy & Hold you are done. If you are not okay with getting crushed in stock market collapses and you want to earn higher investment returns, our Market Signals investment service has you covered. It is simple and easy to follow along with our recommendations.
When you simplify and improve your investing this way, you can concentrate on the important work of saving and investing as much money as you can. You can also free up time to focus on doing the things you enjoy.
Simplify and Enjoy!
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.
Stocks have been declining for the last three weeks. The markets needed to take a breather after the big gains posted since November of 2023. Recent inflation and interest data along with news from the Middle East are weighing on the markets.
Looking at the graph below, we see the strong steady move off the lows reached in October of 2022. There were a couple of small reversals in early 2023 and a sharp reversal in October of 2023. Between November of last year and the third week of March this year, the S&P 500 and the Nasdaq (top two lines) have moved sharply higher. All three major stock indices have pulled back in the last three weeks.
Notice how the Russell 2000 index is still 20% below its all-time high reached at the end of 2021. Small cap stocks have still not recovered their losses in 2022.
Let’s take a look at bond pricing going back to 2020. The top or blue line below represents the price of intermediate term bonds and the orange line represents to price of long term bonds. Bond prices started falling in 2021 and fell off a cliff in mid 2022.
Unlike stocks, bonds have not rebounded in 2023 and 2024 because of the continued inflation and interest rate concerns. In fact, bond prices have been dropping in the last two months due to increases in interest rates.
I hope you have been paying attention to my ongoing recommendations to avoid bonds and anything other than large cap US index funds for your stock investments. The previous two charts clearly show the cost of holding small cap stocks and bonds. Target date fund investors and people who follow the asset allocation strategy that advisors pitch have gotten crushed over the last couple of years by following that bad investment strategy.
Recent inflation data has not been viewed positively by the market. The market is still expecting rate cuts from the Fed this year, but the inflation rate seems to have stalled out at around 3.5%. But those rate cuts are now expected to begin later than previously expected. Economic growth and employment data are still strong, but all eyes will be on inflation going forward.
If the recent price declines turn out to be more than just a temporary setback, Market Signals subscribers will have their saving protected against any worst case scenarios.
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.
Investing is hard. Investing is frustrating. Investing is even more difficult when fear guides your investment decisions.
If you are in retirement or near retirement, you know that stock market declines can change your financial future significantly. Yet, you also need to generate high investment returns to support your income in retirement.
The risk of stock market meltdowns is the price of admission for investors. No one ever knows the timing or the magnitude of recessions or bear markets, but you know they will happen at some point. Those risks are ever present even if they don’t happen very often.
How you deal with the fear of investing in the stock market is one of the biggest determinants of your success. Fear and greed cause most people to make poor decisions.
Guessing at what is going to happen or listening to someone predicting what is going to happen rarely works out. Even if you get lucky and reduce your stock exposure at the right time, you will lose because you won’t get back into stocks at the right time.
Holding bonds in your portfolio is not the answer either despite what the industry professionals say. The data is very clear on this. Bonds will only drag down the investment returns of your portfolio and they don’t always provide downside protection.
Investing in gold also won’t help. It does go up sometimes during stock market collapses, but it performs significantly below stocks the other 85% of the time.
Holding different kinds of stock market investments won’t protect you. When the broad stock market declines it affects all stock investments. Small cap, mid cap and international stocks all take a hit.
The investment industry’s only solution to this problem is the tired, old Buy & Hold strategy. They tell you to just “ride it out”. They are correct when they say stocks will recover, but sometimes that can take seven year or more. And watching your life savings get cut in half is painful. And older investors don’t always have time on their side.
What is one to do?
The right way to handle this challenge is having a proven strategy and a disciplined process to investing.
This is why I created the Beyond Buy & Hold system.
The best investors have a disciplined approach to owning the best funds and a proven quantitative system to avoid the worst of bear markets. Our MARKET SIGNALS investing tool gives investors just that. It puts the odds in your favor. It captures the large stock market gains in up markets and protects your savings in down markets.
The stock market is in an uptrend 85% of the time, growing at double digit rates. You want to be aggressively invested (100%) most of the time. Having a proven system to sidestep the bear market crashes gives investors the confidence to invest aggressively in the stock market.
You don’t have to worry when you know you have a system to avoid the damage caused by bear market crashes. Imagine investing in total confidence and without fear of the next market collapse.
If you want to learn more about Market Signals, click the link below to set up a free consultation. As part of the no obligation process, you will also get a free set of projections for your retirement accounts along with recommendations on how to improve your investing results.
You have nothing to lose and potentially millions to gain.
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.
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