Do This When the Market Is Down

Shah Gilani|January 26, 2024

Last July, I went on Fox Business Network’s Varney & Co. and Making Money With Charles Payne and declared that we were in a new bull market. I said it was time to get back to buying dips.

My analysis was straightforward. The trend had changed. The S&P 500 was up more than 30% from its October 13, 2022, lows.

Granted, it didn’t feel like we were in a bull market in August, September or especially October.

But I kept pounding the facts. The trend was up. And from the end-of-July highs to the October lows, the S&P 500 fell only 10.5%.

That was a correction… and a “buy the dip” opportunity.

I hope you bought those August, September and October dips. My subscribers sure did.

The fact is, there’s a big difference between questioning a bull market – especially a newly declared bull market – and sticking with the trend.

Here’s another fact… If there’s a Wall Street saying that’s worth its weight in gold and then some, it is this one: The trend is your friend.

The markets are rallying hard and fast. Folks are questioning why… how… for how long… and how badly we will get burned.

I get it. There are several scary bear market cases naysayers can make and have been making.

What if inflation rears its head again and the Fed has to raise rates for credibility’s sake?

Markets would tank, the bears say, because they’ve risen on thin air and hope.

What if the Fed doesn’t cut rates in 2024?

Markets would tank, the bears say, because several rate cuts have already been priced in. Markets and investors got ahead of themselves and are now vulnerable.

What if we fall into a recession?

Markets would tank, the bears say, because traders have priced in a recession-free, “Goldilocks” economy in 2024.

What if either of the two ongoing wars spreads and forces superpowers onto the battlegrounds?

Markets would tank, the bears say, because no one expects the Russians or the Chinese or the Americans to start shooting at each other.

What if consumers default on credit cards and loans en masse… corporate debt sinks a major company or two… or sovereign debt pushes countries into default?

Markets would tank, the bears say, because the amount of debt around the globe is unsustainable.

What if AI interference in the U.S. presidential election leads to civil unrest, riots or worse?

Markets would tank, the bears say, because democracy and liberty coming under attack from within our country would kill capitalism.

What if any of those scenarios plays out?

No one knows what will happen. I just know that all those bear cases are out there. They’ve been out there. Markets have been “climbing every wall of worry.”

And yet… the trend is still, decidedly, up.

Again, the trend is always your friend.

If you’re worried… just make sure you have stops in place so you can sleep at night.

Since the trend is up… and we’re in a bull market… I’m buying all the dips. And you should be too.

Until, that is, the trend changes.

And when it does, I’ll tell you.

So stick with me.

Cheers,

Shah