When “Buy and Hold” Isn’t Enough

Posted On Feb 7, 2019 By Emily Clancy

  • Is Tim Sykes’ penny stock trading “crazier” than “buy and hold”?
  • Why traditional investing isn’t good enough for your retirement account
  • Markets in January? Greg Guenthner says, “It’s complicated…”
  • Mike Burnick sees signs of life from scary bond market
  • The Fed takes a U-turn
  • Brexit: The Road meets Y2K?

“When I first wrote my best-selling book An American Hedge Fund, several ‘financial experts’ told me straight up that I was crazy,” says penny stock trader and expert Tim Sykes.

“They didn’t think average retail investors and traders would understand my niche strategy that, I’ll admit, was definitely not ‘buy and hold.’”

For those of you who might not remember, Tim Sykes is anything but a “buy and hold” guy. Tim’s been trading penny stocks since his days as an undergrad at Tulane University, when he started turning a small stake into a $4.8 million fortune.

“I like to start my story with just a PENNY,” says Tim, “because I’m a penny stock trader at heart. And I want to show people how big that penny can grow.”

On the other hand…

“The mainstream’s investment strategy, a strategy that at best earns them 10% a year, maybe 20% in a truly exceptional year” — that’s just not good enough for Tim.

“They tell you to save money for 30, 40 years and let your wealth compound over the decades,” he says. “Then you might have a chance of retiring with enough money.”

A chance? According to a 2016 TD Ameritrade study, a full 25% of Americans say they’ll never be able to retire. Ever. And that sentiment’s shared by millennials all the way to baby boomers.

“When you’re in your 30s, 40s and 50s, you’ve got tons of bills to pay… a mortgage, your kids’ tuition, on top of feeding your family, etc….

“How are you supposed to give your family the good life you want to provide them while still saving enough for retirement?” Tim says.

Truth is, many Americans cannot — or do not — and the research bears that out.

Northwestern Mutual’s 2018 Planning and Progress study shows 21% of Americans have nothing at all saved for retirement while a further 10% have managed to scrape together $5,000 for their “golden years.”

Michael Loftus tweet

That’s over 30% of Americans who have $5,000 — or less — saved for retirement.

“Meanwhile, the average Social Security benefit of about $1,400 is an absolute joke,” Tim says. “Good luck paying all your living expenses and medical bills with that pittance.”

He calls it “a crisis in the making.”

[No arguments here… in fact, Dave took a deep dive Monday into Social Security’s looming insolvency — including the Dems’ proposed overhaul.]

On the flip side: “Let’s say you’re approaching retirement and you’ve managed to have a nice nest egg saved up…

“What if a market crash comes along and wipes out half your wealth practically overnight?”

Perhaps you can relate… especially if that was your portfolio during the Great Recession.

According to The Balance: “On Oct. 9, 2007, the Dow hit its pre-recession high and closed at 14,164.43. By March 5, 2009, it had dropped more than 50%, to 6,594.44.

“Although it wasn’t the greatest percentage decline in history, it was vicious.”

Was. It. Ever.

The Great Recession notwithstanding — the markets are experiencing wild swings now. “These past couple of months have proven how hard and fast markets can fall,” Tim continues. “We’ve seen plenty of days where the Dow has lost several hundred points in a day.

“And if you’re a ‘buy and hold’ investor, your investments have probably suffered,” Tim says. “This is serious business now.

Tim says: “That’s why I was happy to unveil a brand-new strategy… that lets you steer clear of market collapses.

“That’s because it doesn’t involve risky ‘buy and hold’ strategies that leave you vulnerable to a crash.

“You’re in and out too fast,” says Tim. “It gives you maximum flexibility and puts you in charge of your investments, not some broker who wants you to buy and hold so he can charge you all kinds of fees and commissions.”

Tim’s not suggesting you go all in on his strategy; diversification’s necessary. “But putting a portion of your portfolio into it could be extremely valuable.

“Look, if you ask me, following traditional financial advice is among the riskiest things you can do with your money,” says Tim, “because your money’s tied up in ‘buy and hold’ investments that are highly vulnerable to a crash.”

But… “if you know how to use my strategy,” he says, “you’re in and out before a crash can erase your wealth.”

Because Tim’s strategy “greatly reduces your vulnerability to a market crash,” he concludes, “it’s like having crash insurance.”

[Ed. note: Is it time to retire your “buy and hold” approach to retirement? And reduce your nest egg’s vulnerability… while watching profits add up in your account?

After you see what happens in this short video… and how you can do it yourself — with some expert guidance from Tim…

You’ll want to start right away for a cash windfall as early as Monday.

Click here to see how you can start making money this weekend — and almost every weekend thereafter.]

“The state of the stock market is… a little complicated these days,” says Agora analyst Greg Guenthner.

“Late last week, the Dow was the first of the major averages to make it back to its 200-day moving average following the sharp fourth-quarter correction. The blue chip index broke through this line in the sand with little trouble to begin the trading week and hasn’t looked back.”

Next up? The S&P 500 that’s *just* below its 200-day moving average…

To It's 200 MA-Chart

Then there’s the Nasdaq: The index gained the most percentagewise in January… but is that necessarily a good thing?

Greg notes this weird market quirk: “When the index rises by 9% or better in January, the following February averages a decline of 0.44%.”

To the markets today, where the Dow’s down 250 points, to 25,141…

This after White House economic adviser Larry Kudlow reignited U.S.-China trade war fears, saying: “We’ve got a pretty sizable distance to go here.”

For what it’s worth, Kudlow went on to say Trump’s feeling “optimistic” that a deal will be struck between the two global superpowers before new tariffs go into effect come March.

So there’s that…

To the S&P 500 — down 32.43 points, to 2,699.24; as for the Nasdaq, it’s down 95.37 points, to 7,280.

To commodities: Oil’s down $1.57, to $52.44 for a barrel of West Texas crude. Gold is up slightly, 20 cents, to $1,314.60 per ounce.

“Perhaps the least talked about but most important green light for more stock market gains came from the junk bond market,” says our income specialist Mike Burnick.

“High-yield bonds gained 6% in January.”

January Junk Bond Rally-Chart

Mike says: “This tells me that the normally recession-wary junk bond investing crowd are very confident about the state of the economy.”

Need more evidence that December’s sell-off’s a thing of the past?

“The S&P 500 gained a stunning 8% in January,” Mike says, “which is bullish for the rest of 2019.”

Not only that but the tech-laden Nasdaq was up 9% and the small-cap Russell 2000 index gained 11%.

“And if the old but reliable adage ‘As goes January, so goes the year’ holds true again, there should be plenty more upside to come.”

Just how reliable? “Since 1936, the stock market has finished the year with a gain 92% of the time when the stock market is up during the month of January,” Mike says.

So… just an 8% failure rate. Not bad.

“And the icing on the cake was the Federal Reserve’s drastic U-turn on interest rates,” Mike continues.

Fed chairman Jerome Powell said “financial developments” came up (pssst… a sagging stock market) that put the brakes on rate hikes while hinting the Fed might rein in quantitative tightening, too.

“The Fed just put a floor of support under the stock market,” says Mike “exactly what the bulls wanted to hear.”

(Twenty-five-year investment veteran Mike Burnick has taken the wraps off a way American seniors can add as much as $383,515 to their retirement… Starting as early as today, Feb. 7.

Click here now to find out how.)

Brexit Boxes go mainstream: With just seven weeks to go until Great Britain exits the EU, anxious Britons are stepping up “prepping”…

We reported on this phenomenon in November when the average Brexit Box was simply a collection of gourmet EU items people stashed away in case of disrupted supply lines.

Things like bottles of tonic water, coffee and French marmalade are hardly necessities — well… a case could be made for coffee — but the Brexit Box has become something altogether different (think Cormac McCarthy’s The Road meets Y2K).

“The ‘Brexit Box,’ retailing at 295 pounds ($380), provides food rations to last 30 days, according to its producer, businessman James Blake, who says he has already sold hundreds of them,” Reuters says.

Brexit

Aww… dried chicken mince again?!

The box contains freeze-dried British faves — chicken tikka, macaroni cheese and chicken mince — along with a water filter and fire starter.

The box, however, doesn’t contain lifesaving medications some patients depend on.

To that end, “pharmaceutical companies have been asked by the Department for Health and Social Care (DHSC) to have a minimum of six weeks’ extra supply over and above their usual reserves,” reports Time.

“Dr. Liz Breen, a researcher in health service operations at the University of Bradford, believes pharmaceutical supply chain shortages are relatively common,” Time says, “but that a no-deal Brexit could exacerbate the problem.”

That’s grim news for insulin-dependent patients, for example; a rep at health care company Novo Nordisk says, “We import everything — no insulin is made in the U.K….”

Meanwhile, Great Britain’s minister for health “urged health and social care providers — including hospitals, care homes, GPs and community pharmacies — not to stockpile additional medicines themselves.” (Emphasis added.)

Even though Britons probably won’t be able to stockpile meds — we said it in November and it bears repeating — if you do a little prepping for what turns out to be a nonevent, no harm, no foul, right?

Best regards,

Emily Clancy
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P.S. Are you worried recent market volatility is the beginning of a bigger crash?

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