How Markets Affect Your Wallet

We are overrun with analysts, pundits, and managers that tell us to simply put money in the markets and let it ride. “Don’t worry about it!” they say. “Over the long term, it always goes up!” they tell us.

That sounds good in theory, but what if it doesn’t “always go up”? What if you wake up one morning to find that your investments in the markets have blown a huge hole in your retirement plan? Which market pundit is going to refund you all the money you lost?

Sure, the Fed will cut a check to Citibank, but individuals are on their own. We actually have to live with the consequences when things don’t work out in the market, which is why the best thing we can do is pay exceptionally close attention to what we own, have a plan long before any action is required, and research.

Markets are Always Changing

Long-term buy and hold is dead. We cannot, and should not, trust that things will simply “work out” in the markets.

Not only has this shown to be wrong in the past (ask anyone who retired in 2001, 2002, 2008, or 2009), but current conditions also look ripe for a downturn.

The economy was flat in the first quarter, housing is weak, China is slowing, Europe is barely above zero, and markets are at all-time highs. Something’s gotta give.

Does it make sense to set your investments and then simply forget them? Of course not. Don’t trust your financial well-being to long-run averages!

In addition to knowing why we buy securities (is it fundamentals, technical, or both? Is it a recommendation from a cab driver or a friend?), there should also be a clear understanding of why, and when, to sell securities.

In short, there should be a system for putting money to work and taking it off the table. Without it, we are left to struggle with the daily or weekly gyrations of the markets.

Was the last 300 point drop the start of the big one? If the markets are up 500 points, is it too late to get in?

Do you feel like taking on more risk, or less? Is this decision informed by what you had for lunch? Does spicy food drive your risk-taking higher, or make you feel bad so that you want to sell everything?

Instead of letting the rest of the world — vacations, kids, in-laws, work, food, etc. — affect your buy and sell decisions, put some rules in place and stick with them.

Obviously, we believe in our own approach and we have thousands of satisfied clients following Adam O’Dell’s Cycle 9 Alert research, as well as our Boom & Bust portfolio. But the rules of the game remain the same whether you choose to work with us or through some other method.

Don’t get lulled into a sense of security just because investments have recently moved higher, or because some pundit points to a 90-year chart and it looks like a mountain.

You don’t live on a chart, and the chart won’t pay the mortgage. Pay attention to your money, and follow a system.

You don’t want to open your brokerage statement one day to find out that your investments just blew a hole in your future.


Rodney

P.S. To make it easy for you to test drive Cycle 9 Alert, we’ve slashed the price by 56% and backed it by a 90-day guarantee. This offer is available for a limited time only. You’ll find all the information you need here.

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Categories: Markets

About Author

Rodney Johnson works closely with Harry Dent to study how people spend their money as they go through predictable stages of life, how that spending drives our economy and how you can use this information to invest successfully in any market. Rodney began his career in financial services on Wall Street in the 1980s with Thomson McKinnon and then Prudential Securities. He started working on projects with Harry in the mid-1990s. He’s a regular guest on several radio programs such as America’s Wealth Management, Savvy Investor Radio, and has been featured on CNBC, Fox News and Fox Business’s “America’s Nightly Scorecard, where he discusses economic trends ranging from the price of oil to the direction of the U.S. economy. He holds degrees from Georgetown University and Southern Methodist University.

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