The Best Two “Buys” if There’s Another Correction

Keith Fitz-Gerald Jul 19, 2019

Millions of investors make a very fundamental mistake in the pursuit of bigger returns.

They chase “hot stocks” when getting ahead of them is almost always a far better and far more profitable way to go.

I know that sounds obvious… but hear me out.

If you’re of a certain vintage like I am, chances are good that you grew up with the notion that waiting for pullbacks would give you an opening when it came to investing. You were taught to look for “confirmation” before you made you move.

Today’s markets don’t work like that any longer, though. Studies suggest that 60% – 90% of all trading activity is computerized which means that you can’t wait for trends to develop.

You have to be in ahead of time or you’ll miss a huge portion of moves that could make you a fortune. Adding insult to injury, being late to an investment or a trade means that the risks it’s going to turn against you are far higher than most people think.

So, how do you get around that problem?
I get asked that a lot, especially lately now that fears of another correction are creeping in around the edges.

The key, as always, is to buy stocks that are going to survive no matter what and for which a short-term downturn has no impact whatsoever on their business model.

Corrections are often the perfect opening for much longer-term investments if you’re willing to use the chaos to your advantage rather than as a source of fear like most investors who give into their emotions do.

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One of my favorites is Apple Inc. (NasdaqGS:AAPL).

Many analysts don’t like Team Cupertino, but are upgrading it anyway because they’re beginning realize the inevitable rise as it transitions from devices to healthcare.

Goldman Sachs, for example, raised its price target to $187 from $171 despite a very negative note to clients recently. Analyst Rod Hall even went so far as to note that services are now Apple’s key focus because smart-phones have reached near peak penetration – something we’ve been talking about for nearly three years!!!

I joke about it frequently, but I think it’s only a matter of time before your doctor starts prescribing you an Apple watch or any sort of Apple-based application to manage your high blood pressure, cholesterol, weight, diabetes, etc.

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And the beauty in this is that Apple engineers can add a billion+ dollars to the top line merely by changing a few lines of code.

Try a LowBall Order around $170 a share if you’re really nervous about a pull back or Value Cost Average into shares as an alternative no matter what happens to the broader markets next.

Beginners or newly minted investors may want to consider a mutual fund or ETF like the XLK Technology Select Sector SPDR Fund (NYSEArca:XLK) where Apple is a key holding. This isn’t a pure play, but that’s not necessarily a bad thing, either. You’ll sweep in a lot of other tech that’ll go along for the ride. I recommended the play a few weeks ago, and it’s still a solid tech-savvy choice.

In closing, let me leave you with a thought that’s especially appropriate at the moment.

Rewiring your thinking isn’t easy given how much the markets have changed over time, but make the effort anyway.

Buy low, sell high is how the game works.

It’s also how you line up big profit potential no matter what the markets do next.

Until next time,

Keith

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