We’re coming up on the fourth anniversary of a very important conversation we I had regarding the direction of the markets.
Back in late June 2014, I wrote to tell you not to cash out of the market just because it had hit new highs. I quite clearly said I thought we were in the midst of a generational bull market – and the last thing you’d want to do is sit on the sidelines.
Well, what was true then is even truer now. And I can prove why…
See, while the mainstream media has been blasting you with negative headlines about scandals and wars, I’ve been drilling down – looking into the details about what’s really going on.
And here’s something very important I found.
Despite a 10% drop in the markets (a correction), all the volatility we’ve seen since then, rising interest rates, scandals surrounding Facebook Inc. (Nasdaq: FB) and Amazon.com Inc. (Nasdaq: AMZN), and worries about a possible trade war China, first-quarter initial public offerings (IPOs) had their best performance since 2015.
That’s just not something you hear much about amid the general doom and gloom.
But it’s crucial.
See, nothing keeps a bull market on a long-term uptrend better than fresh cash flowing in. And IPOs are Wall Street’s best lure for attracting new money from investors.
The Two-Decade Bull
With the S&P 500 still roughly 7.5% off its recent all-time highs, a lot of investors are getting jumpy.
That makes sense.
We’re getting bombarded with negative news daily.
But we have to understand, that’s in part because bad news sells.
The mainstream media wants to make money just as much as we do.
But all that noise makes it hard for the average retail investor to do the two things that will really build their net worth…
- Focus on the long haul.
- Make sure a good portion of your portfolio is in tech.
Granted, there will be periodic corrections and unpleasant events that will shock the markets into temporary downturns – like the one we’re in the midst of now.
But I still very much believe the conditions in place now could foster a bull market that could last 18 to 20 years.
As you might imagine, generational bull markets are rare.
Most bull markets last about five years before a bear comes along. But with a generational bull market, stocks not only rebound to reach their previous high following a correction – but go on to set new records.
To prove what I’m saying, let’s go back to that chat we had on June 27, 2014. Had you sold all your stocks that day – when many folks were afraid that a new top meant a big decline was at hand – you would have left a lot of cash on the table.
Since then, the S&P 500 has gone from roughly 1,960 to a recent high of about 2,873. If all you had done was invest in an S&P indexed fund, you would have made 46.5% during the period.
But if you had followed my advice and invested in technology, you would have done far better. From that date to its recent high on March 12, the Nasdaq Composite Index gained 72%.
That’s because Silicon Valley-style technology is the driving force for the entire U.S. economy.
If you thinking I’m gilding the lily here, let’s look at another example. The current bull market dates back to March 2009, when the S&P 500 hit an intraday low of 666.79. Since then, it’s gone on to peak gains of 195.1%.
But there’s still plenty of cash out there to keep this generational bull market alive.
A Tech “Fundraiser” Crowds the Market
This is why the recent strong IPO market is so important.
The IPO experts at Renaissance Capital say new issues in the first quarter had their best performance since 2015. And IPOs from tech firms accounted for more than 40% of the quarter’s total proceeds.
During the period, 43 companies went public, raising $15.6 billion. That’s well ahead of the $10.9 billion raised the previous quarter. In those first three months, four companies raised more than $1 billion, which was more than were seen in all of 2017.
In other words, this is a generational bull market, so we should look on market setbacks as new buying opportunities.
And always remember to invest for the long haul.
Having said that, don’t throw caution to the wind. You still need to focus on the basics. Stay in the market… find quality tech stocks… use your rocky market tools to ride them to maximum gains.
For instance, I always recommend taking a “free trade” whenever one of our stocks doubles in value. When you do that, you get back all your original capital and start playing with the house’s money.
If you have big winners that are less than a double, try putting a trailing stop on a part of the holding. Doing so ensures you make money in the short term – and keeps you in the markets for the long haul.
You can also buy test shares if you’ve found a great new “Buy” or want to add to one of your stocks. This method keeps you in front of the market but also means you only risk a small amount of your capital should something terrible occur, such as a full-blown trade war.
And remember, I’m here to help.
While I don’t provide this sort of guidance here at Strategic Tech Investor, I do so at my other services.
For instance, at Nova-X Report, our portfolio has 35 stocks in it – and 29 are in the green. That gives us an 83% win rate on all open positions – even in the midst of this very turbulent market. Moreover, four of those stocks are triple-digit winners (or very, very close to it).
To find out more, click here.
As your tech-investing guide, it’s my job – it’s my mission in life – to make sure you earn as much money as you can… no matter what the markets throw our way.
And I intend to keep doing that here – and at Nova-X.