Editor’s Note: As Chief Investment Strategist of Total Wealth, Keith believes in making his track record of recommendations easily accessible to all readers within seconds – and that’s why he’s compiled an Archives page. Here you’ll find links to every Total Wealth article Keith has published since Total Wealth’s creation on October 2, 2014, posted in reverse chronological order.
Category: Featured Tactics
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Earlier this week we talked about the secret I wish everybody knew when it comes to market timing, and took a look at one of the most valuable Total Wealth tools of all – the Put/Call Ratio. We covered actions you can take right now to maximize your returns.
I also promised you a look at one great trade in particular involving a current social media darling. Today I’d like to keep that promise.
If you’ve been with me for a while, you already know I don’t like social media stocks. They’re not hooked into our unstoppable trends (nope, not even Technology). Their products are “nice to have” instead of “need to have.” And most of them have no real way to make money.
But that’s the thing about tactics…
If you have the right trading tactics, you can squeeze profit out of any stock. Even ones you don’t like.
In this case, I think betting on one stock’s failure may be far more profitable than betting on its success.
I know that this may seem un-American or somehow unethical, but shorting a stock – that is, betting on its decline – is a killer tactic and can be a fabulously profitable tactic used to build your wealth.
That’s a tactic we’ve talked about, but if you’re not familiar with shorting, don’t worry. I’ve got you covered with a special sidebar in a few minutes. So let’s get back to the meat and potatoes.
Here’s the thinking and here’s why #ShortingTwitter is the only social media play I like right now…
Many investors are trying to time the markets, especially lately with concerns over low oil prices, global woes, and Chinese growth in the headlines.
I totally get where they’re coming from. The idea of picking market tops and bottoms is very seductive.
But they may as well try to catch falling knives…
The most recent DALBAR data shows that the return of investors trying to time the markets is a pathetic 1.9% a year over the past 20 years. Worse, they would have to be right a staggering 82% of the time just to match “buy and hold” returns, according to Nobel Laureate William Sharpe.
Clearly market timing is one tactic that does not build Total Wealth. But here’s the secret.
You’re much better off trying to understand sentiment – because that’s how you identify the best and the worst times to put your money to work and rack up the biggest gains.
Today I want to teach you how to do that…
We’ve spent a lot of time in the past few weeks talking about how to maximize your investment returns.
But there’s another side to building wealth in the markets… keeping it.
If you’re thinking I’m going to launch into an article on “risk management,” that’s great, because it means you’re thinking like a market maven and that our time together is worth it.
But, actually, I’m not talking about risk management at all today.
I’m talking about five simple tactics – moves you can make right now – to legally minimize your bill come April 15th, 2015.
Most investors don’t pay nearly enough attention to this and, as a result, pay a terrible price down the line. I’ve heard every excuse in the book over the years as to why but really it comes down to two things: 1) they think it doesn’t matter unless you’re a 1%er or 2) that this is just a subject for high-powered CEOs with billions sheltered offshore.
That’s a shame because keeping more of what you make is a Total Wealth tactic that’s every bit as important as trailing stops, free trades, or even lowball orders – all of which we’ve discussed recently. Maybe even more so.
The numbers are very clear when it comes to investing – the lower you buy, the higher you sell.
That’s why we’ve focused on so many tactics that get you a “discount” on your investment. It’s the best (and simplest) way to maximize upside. We’ve already talked about lowball orders, dollar-cost averaging, and buying puts – all very simple ways to buy lower and maximize your upside – and we’ll be exploring even more of those in the weeks to come.
But there’s one investment, one situation really, where you actually do want to pay more.
I know, I know. That’s akin to financial heresy.
This is the only time you’ll hear me tell you it’s okay to pay a premium for something in the pursuit of Total Wealth.
Look at this to see why…
This has been one of my favorite stocks for over 10 years.
I’ve called it a rock-solid investment, a powerful income play, and a global challenger that would be able to outmaneuver the competition to react to changing consumer preferences around the world. I’ve recommended it as a “BUY” twice to my Money Map Report readers, who had the chance to see great returns of at least 42.90%.
Just last year, I named it as one of just a handful of companies that could survive a U.S. sovereign debt crisis.
Even amid a 3.7% decline in August same-store sales, I remained bullish.
But even I can’t get past what just happened.
Here’s why one of America’s most iconic stocks just got kicked off my “BUY” list…
Gold has taken a tremendous beating in recent weeks and is now tumbling along at four-year lows of $1,160/ounce.
Things are so bad that you can actually buy the Central Fund of Canada Ltd. (NYSEMKT:CEF) – a popular gold and silver bullion investment vehicle – at a 10%-11% discount to the price of gold, because traders think the price of gold will drop even lower.
Frankly, I think that’s fantastic news.
Today I want to show you my secret “gold strike” strategy that’s perfect for moments like this. You’ll get the two tactics you need as a gold investor, a simple test to determine if you own enough gold, and a quick-and-dirty look at how to buy it.
A big grin lit up my face when I opened my trading screens Monday.
That’s because I was looking at the chart for our first “Human Augmentation” target, Ekso Bionics Holdings Inc. (OTC:EKSO). It was trading at nearly $1.90 per share – close to a double from where it was at the time I initially released my “Unstoppable Trend” report on October 2, 2014.
If you’ve been following along with that recommendation, I want to congratulate you on being savvy enough to follow along. And if you’re just joining us, the company is still a great buy. You, too, have plenty of room for a double.
As the first stock profiled in our Human Augmentation trend, Ekso is making some really great moves of its own. We talked about those last week so I won’t repeat that here.
But here is what’s really got me smiling…
This gives us an opportunity to use my absolute favorite trading tactic.
Today I’m going to give you access to a recommendation I released just hours ago to paid-up members of my specialized trading service.
I’ve never done this before, and frankly, I won’t do it often, because it’s not fair to subscribers who are paying thousands of dollars for my profit recommendations.
But this is too big not to share.
In fact, I don’t think you’re going to see another entry point like the one I’m about to share with you for years.
So let’s cut to the chase with today’s opportunity. It’s hooked directly into one of the “Unstoppable Trends” we haven’t talked about yet and it involves a Tactic that’s ideal for market conditions right now. So I want to make sure you know how to use it.
Click here to get access.
On the heels of the worst volatility in nearly 20 years, and more “crash talk” than we’ve heard maybe ever, it’s starting to look like a smart time to hit the eject button and get out of the markets altogether.
In fact, that’s probably the most common question I’m hearing these days:
“Do I really want to be in stocks right now?”
Believe me, I get it. Folks are emotionally shattered from seeing their wealth cut in half twice – once in 2000 and again in 2007-08. That’s why 55% of Americans have no money in the stock market at all, according to a Federal Reserve Board analysis from last year. I think the number is actually higher, because of the anecdotal evidence I gather on a daily basis.
That means hundreds of millions of people are missing this blindingly simple tactic that drives our Total Wealth strategy.
If only those people would look at this chart…
My sources tell me that Ebola is probably the most serious threat to humanity since the Bubonic Plague of the Middle Ages. Already it has spread to a dozen countries, including the U.S., and more than 4,000 people are dead. According to Dr. Bruce Aylward of the World Health Organization (WHO), mortality rates are rising and now sit at 70%.
This outbreak is more grim proof that Trend No. 6 – War, Terrorism, and Ugliness – is indeed a growth industry.
That’s the next trend we’ll be discussing, though it’s easily my least favorite both personally and professionally. But it’s very, very important. So please stay tuned for that in the weeks ahead.
In the meantime, Ebola has the potential to be a serious market event before it’s brought under control. So we need to talk about it logically – no hype, no conspiracies, and no nonsense. I mention those things because they’re all emotional inputs that can cloud your thinking and have a seriously negative impact on your money.
Here are the tactics you need on hand for the Ebola market event.
The markets fell hard yesterday, in the biggest one-day drop so far this year.
Traders kept their fingers on the sell button pretty much all day. The Dow tumbled 335 points, the much broader S&P 500 got shellacked 41 points, and the tech-laden Nasdaq lost 90 points.
Yet this is NOT a “run for the hills” moment.
Instead, it’s a fantastic short-term trading opportunity.
Reversals usually are. They result in a fundamental change in the pricing assumptions that otherwise propel prices higher. Most of the time they’re the result of changes in some fundamental catalyst like interest rates, Fed notes, or, in this case, the IMF’s report that global growth will only hit 3.3% this year.
So what do you do?
There are a lot of ways you can profit when the markets change direction. In fact, the menu of choices makes ordering designer coffee seem positively simple. There are shorts, leveraged inverse funds, spreads, derivatives, and futures contracts with all kinds of exotic names (though most are simply ways to separate you from your money).
If you want simple protection you can “set and forget” as an investor, consider buying a fund like the Rydex Inverse S&P 500 Strategy Inv (RYURX). It’s an inverse fund that tracks the S&P 500 and rises 1% for every 1% the index falls. Studies suggest that having 2%-5% in a choice like it can not only dampen overall portfolio volatility, but hedge the income stream and principal value of your investments at the same time.
It’s so effective that I advocate keeping a permanent allocation to inverse funds for just these kinds of market conditions. That way you’re never caught by surprise.
But if your goal is quick profits, get ready to make this trade instead…
My mission and vision with Total Wealth is to help you uncover tremendous wealth-building opportunities through our six unstoppable trends, maximize your profits with the best trading tactics, and (perhaps most importantly) protect what you have.
Today I want to keep that promise by talking about tactics.
Many investors think they have this covered but, in reality, the savviest investors are always on the hunt to learn new tactics in the pursuit of profits. Like a chef who discovers new ingredients, they are constantly improving the “recipes” they use for success.
Before we start, though, I need you to make me a promise: that you will NEVER use this one trading tactic we’re going to talk about today.
Ironically, this is one tactic that comes naturally to all of us and a mainstay investment principle used by 99% of the population.
But it undercuts everything else you do as an investor.
Here’s the one tactic you can’t use…
Most investors operate in “set it and forget it” mode. They buy a stock and then just let it ride.
That’s a mistake.
Either the markets will change over time, in which case you’ve got to re-evaluate your objectives, or – as is frequently the case with small, innovative companies – the company itself changes, in which case you’ve got to adapt your tactics to stay ahead and on the path to profits.
I bring this up because the latter is where we are today with Ekso Bionics Holdings Inc. (OTC:EKSO), the little company we’re targeting as part of the Human Augmentation trend.
On Thursday, October 2, Ekso announced that it was selected by Boston Dynamics, which is a part of Google Inc. (NasdaqGS:GOOG), to continue developing defense-related technologies for the DARPA Warrior Web Task A project. This is great because it’s an extension of a previous collaboration – and important validation that Ekso is on the right track.
Given the stock’s strong response last week (and today) and the potential for more media excitement around the extended contract with Google and other projects just like it that are undoubtedly on the drawing board, I think you’re going to want to adapt your tactics to stay ahead of other investors on the path to profits.
Here’s what to do…
Mar 25, 2014
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