Call me crazy, but I get excited when the market sells off.
This is doubly true when tech leads stocks down.
This explains why I was so energized on Wednesday when the tech-centric Nasdaq Composite lost more than 3.5%. And then entered correction territory yesterday – down about 10% from its late-August highs.
Here’s the thing. I’ve been around the markets my entire adult life. So I’ve learned the importance of taking the long view. I’ve been through more market selloffs than I care to count.
But the singular truth here is that the market always moves back up. And when it does, tech will lead the way once again.
Of course, it can be rough in the meantime.
But I can’t worry about toughness. As I like to remind folks, my job is to help you make money no matter what the market throws our way.
With that in mind, today I’m starting a two-part chat with you designed to help you profit from the recent selloff.
We’ll start by looking at three profit-producing tools every tech investor needs. Then we’ll follow that up on Tuesday with three hand-selected investments that you can buy now to lead you out of this mess.
Cloudy Days Ahead
There’s no doubt that the markets have turned choppy once again. Simply stated, Wall Street hates uncertainty, and there’s a lot of that in the air right now.
World leaders are afraid that growth outside the United States is starting to slow. And we have doubts about President Donald Trump’s ability to advance his agenda.
I think part of the market retreat is due to most polls showing the Democrats retaking the U.S. House of Representatives on Nov. 6.
The Democrats are talking about trying to repeal some of the GOP tax cuts that have helped spur growth. Worse, they’re taking impeachment — of the president and Supreme Court Justice Brett Kavanaugh, who took the bench just days ago.
Now, I don’t think the Democrats are going to take the House – but no one on Wall Street called to get my view on the matter.
One thing about being older, I very much recall the Watergate hearings during the summer of 1973. Millions of us were glued to the TV or radio for these hearings.
So, if the Democrats do win, and then use a similar playbook as they did back then, I think it will rattle markets once again for at least a few months. All of the media focus will consume the nation.
Still, I remain a huge tech bull and am thrilled with the economy overall. We have 4.2% domestic growth, the lowest unemployment rate since 1969, and high confidence among consumers and businesses.
However, I know from hard-won experience that you can’t throw caution to the wind. To make money over the long haul, you’re going to need three things:
- A savvy investing guide like me in your corner.
- Excellent, time-honored portfolio management skills.
- A great list of winning investments.
Now then, it’s time now to drill down and give you a look at the profit-producing tools you can use to turn this market sell-off to your advantage.
So, without further ado…
Profit Producing Tool No. 1
The Cowboy Split
I’m shocked more professional investors don’t know about this powerful moneymaking tool. But it’s one we use here all the time.
Simply stated, the Cowboy Split is a staggered-entry system. You take a position in a stock at market price – and then enter a “lowball limit” order to buy more if a discount comes your way.
In general, I recommend employing a 15% to 20% discount from your entry price as a second buy point.
Here’s how it works…
You acquire 50% of your intended stake of XYZ Tech Corp. at a price of, say, $50. In this case, should the market trigger your “lowball limit” order, you would automatically buy a second 50% stake at $40 a share – for an average price of $45.
Now assume XYZ rallies all the way to $60. You would then have 16.6% appreciation on your original shares. But it’s that second stake that really juices your profits.
See, that second half’s gains are double those of your first buy. This way, you end up with overall gains of 25%, or roughly 50% more than you would have had you just bought your full stake at $50.
Profit Producing Tool No. 2
The Free Trade
Whenever a stock doubles in value, take a Free Trade and lock in gains. That’s a sell order for half of your stake. Doing so means you have all your original capital back and are then playing on the house’s money.
It’s a powerful way to protect profits against a choppy market, with two side benefits.
- You can end up owning a suite of stocks for free.
- You stay in the position to reap any new upside.
Let me give you two classic cases of just what I’m talking about. At my Radical Technology Profits premium trading service, 30% of the stocks we hold have doubled in value. So, we’ve made a series of Free Trades.
This tool got us off to a great start this year. On Jan. 5, we took two Free Trades, one on a gene editing biotech leader and the other on a tech firm that provides gear to the mobile sector.
These were not isolated events. For instance, I recommended a medical aesthetics tech firm back in December 2016. Just eight months later, it had scored a 106% gain, triggering a free trade. The remaining stake is up 193%.
Profit Producing Tool No. 3
The Autopilot Profit System
Whenever possible, set yourself up so that you exit a position with specific gains no matter what happens.
This is where what I call The Autopilot Profit System comes in handy. It’s a unique way of protecting profits with a combination of taking gains and using trailing stops.
It works like this…
Let’s say you sold half of XYZ Tech when it was up 30%. Now, you can afford to see if the stock sill has more upside while at the same time protecting your profits against any reversal.
In this case, you could set your stop at your original entry point and walk away with combined gains of 15%. Or you can set the trailing stop above your entry price to lock in more money.
The beauty of the system is that you set up your minimum profit figure in advance. After that, there’s no need to worry about what happens, because the Autopilot Profit System is protecting your hard-won gains.
You can see that by using our Profit Producing Tools you can keep on investing in winning tech stocks – even during a tech correction – and know that you’re prepared for anything the world throws your way.
Of course, these aren’t the only tools you can use to make a profit in the sort of wild conditions we’re in the middle of right now.
The tactic I’m thinking of doesn’t involve stocks, or even options. In short, it’s a proprietary algorithm that can determine, with 93% accuracy, the direction the market is headed in next, a full week in advance. (More details here).
And you can now execute a trade that allows you to automatically collect as much as $11,000 a week so long as the market goes in the direction you expect it to.
See you back here soon.