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Getting Ready For The Next Leg Up

2 0 9
20.10.2021

With the economy set for historic growth this year, stocks are poised to soar. The dreaded pullback everyone had been fearing has come and gone. At its worst, the Dow was down by -5.66%, the S&P by -5.87%, and the Nasdaq by -8.38%. Since then, the Dow has surged by 5.36%, the S&P by 5.45%, and the Nasdaq by 5.01%, all in less than 3 weeks. Unfortunately, too many investors panicked during this latest pullback as they braced for more downside. Some sold. Others shorted. And some refused to buy this market for fear of it going lower. Then it didn’t. And stocks, once again, are back on their record run. We saw the same story play out earlier this year in mid-February through early March. We saw a quick pullback. Investors feared for the worst. Then stocks snapped back and raced to new all-time highs. If you missed out on these latest rallies due to disbelief, or fear, it’s not too late. Because it looks like there’s a lot more upside to go. Fear Not There was nothing ominous in the two pullbacks we saw this year. It was just your normal, ordinary pullback. Every bull market has them. In fact, stocks usually pull back about -5% roughly 3-4 times per year. (A pullback is defined as a decline between -5% and -9.99%.) And stocks usually correct -10% on average about once a year. (A decline of -10% to -19.99% is called a correction.) But these are the pauses that refresh before the next leg up. And now YTD, the Dow is up 15.7%, the S&P is up 20.1%, and the Nasdaq is up 17.2%. While pullbacks are never fun when they’re happening, if you know these are commonplace moves, you can instead look at them as opportunities to buy rather than places to sell. New Highs Beget Higher Highs But now that the pullback is over, and stocks are back on the upswing, plenty of those same people are wondering whether to buy – having traded in their fear of a pullback for fear of buying stocks making new highs. (Why do some people make investing so unnecessarily hard?) For some reason, people seem reluctant to buy stocks after making new highs. I suppose they may feel like they missed the move, or that now stocks have more room to fall. But statistically, this is just not true. For one, the S&P, for example, has made 60 new high this year alone. Can you imagine all of the money you would have left on the table if you were afraid to get into stocks making new highs? But second, and more importantly, studies have shown that stocks making new highs have a tendency of making even higher highs. In fact, using S&P price data going all the way back to the 1950’s, it shows that stocks typically go up in the subsequent six months following new all-time highs. This means that stocks making new highs aren’t at any greater risk of going down. Quite the contrary, there’s a higher probability of stocks going up even further! More . . . ------------------------------------------------------------------------------------------------------ Get Your Free Copy of Finding #1 Stocks – A $49.95 Value One single idea changed Kevin Matras’ life as an investor, enabling him to tap into the greatest force driving stock prices. In Finding #1 Stocks, Kevin reveals his top stock-picking secrets and strategies based on this powerful idea. Now you can claim a free copy of the 300-page hardcover book. Over the past five years (2016 through 2020), while the market climbed an impressive 103.9%, these strategies actually produced gains up to 130.5%, 381.1%, and even 580.6%.¹ You can take full advantage of them........

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