Everything You Need to Know About Moving Forward in Volatility-Stricken Markets
We’ve been in for a wild ride in 2020, markets aside, we’ve seen a pandemic, a civil rights movement, and natural disaster after natural disaster – in an election year, no less.
Markets have done exactly what you’d expect in such unprecedented times, which is to say, they’ve gone absolutely buck-wild.
While Q3 is coming to a close, I wanted to make sure to address some crucial questions that have come out of this years’ insanity before we shift our sights to the election, what’s to come in 2021, and more.
Here are some of your best questions, and as always, if there’s something you want to ask that isn’t addressed here, comment below and I’ll get them on the next round…
- What if you’d sold everything during the March collapse in LQD? You’d have lost out on the swift return back up again… Why will next time be different? It usually isn’t! – Martin
The March selloff in LQD was totally justified. So was the bounce back when the Fed stepped up as quickly as they did, saying they’d flush the financial system with as much liquidity as needed. That’s what triggered the buy-the-dip rush into all the beaten-down quality stocks and the story stocks. This time would be different because if LQD breaks down, in spite of the Fed buying shares to hold it up, it would signal to markets the Fed’s support isn’t bigger than the markets. And that’s scary.
- What is angel investing really about? My niece mentioned it to me a few weeks ago… I’m not sure how I feel about it. Sounds like a lot of risk… – Julia F.
Angel investing is early stage investing in start-ups. There are obvious risks, because you’re investing in companies that don’t have a track record. The company’s managers or founders may have track records shepherding other start-ups or companies, which you’d definitely want to see. Start-ups usually aren’t making money and their prospects are out in the future, which means you have to be patient, and understand that time can be your friend or your enemy.
While the risks are obvious, the potential rewards can be unimaginable. In 2000 SoftBank invested $20 million in a startup called Alibaba, that investment is now worth more than $125 billion! That’s equivalent to making 6,250 times your investment. At that rate an investment of $1000 would be worth $6,250,000. Not a bad risk reward ratio for Masa Son.
I recommend angel investing if you’ve done your research, or better yet, have an expert by your side. Recently, my colleague Neil Patel, an extraordinary angel investor himself, introduced me to one of the best minds in the angel investing and startup scene.
Neil’s called him one of the greatest minds of our time, touting – and I quote – “superhuman intellect” and after seeing his resume, I’d have to agree.
As a college freshman, he launched his first business, which eventually made him over $2 million a year. Later, he started a marketing firm that specialized in tech, which was bought out for $25 million, and then continued on to create an apartment-rating site that was acquired by a top startup,
By 21, he became the youngest self-made millionaire.
Today, at 34, this multi-millionaire uses that “superhuman intellect” to invest in startups – 55, to be exact. And out of that 55, 53 were wildly successful.
That’s a whopping 96% success rate when it comes to investing, and those numbers speak for themselves. Now, he’s showing you how to follow in his footsteps and invest in the latest startups with the hottest products, and potential big money to follow. Click here for more details.
- How do you feel about gene editing and the likely impact it will have on stocks like EDIT and NTLA? – Doug J.
Gene editing is controversial, on a lot of levels, but it’s also fantastic since it can be used to create new transformative genomic medicines. Both Editas Medicine Inc. (NasdaqGS:EDIT) and Intellia Therapeutics Inc. (NasdaqGS:NTLA) rely on gene editing technology, almost exclusively, in other words it is their business, which makes them risky investments. Both of them lose money and have huge bets against them, in the form of short-sellers. But, they’re both in the discovery business which means if they come up with a blockbuster medicine or treatment protocol their stocks could skyrocket.
- I would be interested in any suggestions you have on natural resource/commodity related stocks for what I see as big inflation ahead. Some of the junior mining & exploration companies have been way outperforming lately but not all of them may be sound investments for the long term as they get hyped or pumped/dumped by internet sites & email campaigns. There are always the ETFs but picking good individual companies can do better it seems. Appreciate your sometimes brutal honesty on these markets as well as individual stocks. – Kevin R.
Kevin, I’m going to dig deeply into resource commodity related stocks because like you I’m of the opinion they’re going to start to percolate soon, probably after the election, maybe starting around the first quarter. I’m looking at several already that I flushed out from ETF related portfolios, which is a good place to find some off-the-radar prospects. The small “miners” are too manipulated by the likes of the pump and dumpers you’re aware of. I wouldn’t touch any of those. Right before the election I’ll start naming names for you, so stay tuned to Total Wealth.