My friend, I have some bad news for you. I hate to say it. But it's just the nature of these things...
When this Melt Up ends, and the Melt Down is in full effect, everyone you know will lose more on the way down than they made on the way up.
Everyone.
I hate it. I know that this will even happen to many of your fellow DailyWealth readers. Most embarrassingly, these folks will do it to themselves.
I can put up all the "Caution: Cliff Ahead" signs in the world. However... at the peak, people will fall in love with their stocks.
They will believe they know how to make money... They will believe their stocks will come back... And ultimately, they will ride them a lot lower. The powerful uptrend reverses, and it becomes a powerful downtrend.
However, I also have some good news...
Losing everything in the Melt Down is an entirely avoidable situation. It doesn't have to happen.
But to avoid it, you have to start thinking differently. You have to start thinking like a friend of mine...
Sean Poynter grew up in a house 100 yards away from mine in Florida. In 2018, he became the world stand-up paddle boarding champion.
He was the underdog from Florida's small waves. But he beat the best surfers in the world, in the best waves in the world, to achieve that goal.
How did he do it? His answer surprised me.
Of course, he trained hard, both on land and in the water. But he also did something else that I didn't expect...
"Visualization," he said.
"I visualized myself winning each heat in advance," he continued. "I visualized what I would need to do, in every possible way. I repeated this in my head, multiple times a day. And then I simply went out and did it – I did what I had already achieved in my head."
Impressive stuff for a young man in his 20s. Sean went "all in" on dialing his brain to do the right thing when a tough situation arrived.
I'm not talking about "positive thinking." Sean didn't just picture everything going his way. Instead, he thought through every possibility... so if something went wrong on the big day, he knew he'd be ready.
After he explained that to me, I decided to try it for myself...
At our Stansberry Alliance conference in Las Vegas, I had the opportunity to play guitar on stage with Mike Dawes – who was basically voted "best acoustic guitarist on earth" for two years running.
I didn't want to make a fool of myself. I wanted to entertain our readers, and I wanted to hang in there with Dawes. So I prepared myself as best I could. And I spent a lot of time with my eyes closed, simply visualizing how I would succeed regardless of how bad things went.
Everything went wrong behind the scenes... Mike had some equipment issues, and we didn't get to practice what we were going to play in front of a massive audience. It was just, "You play here, you stop here, we both play here, then we fade out, and it will all be good... got it?" Uh, yeah.
It worked out great. I had nothing... no practice with Mike, no sound check for me. Just a toss into the deep end. (Here's a link to the performance.)
If I hadn't fully prepared mentally for all possible outcomes, I would have been a wreck. Instead, everything went fine, despite the rocky circumstances.
I tell you this because if you want to survive the coming Melt Down, you need to mentally prepare now. You need to visualize what might happen, how things could go wrong for your portfolio, and how you'll react.
This is crucial. The fact is, there isn't a single script you can follow for what's to come. It will get messy... and likely in a way you aren't prepared for.
If you expect a clear signal that the Melt Up is done, you're toast. You'll have no chance to navigate the choppy waters ahead.
While I don't know how things will play out exactly... I know it'll be scary. And the only chance of getting through it is to mentally prepare now.
Yesterday, I explained how perspective and experience will be key in surviving the Melt Down. If you have both, then give the visualization trick a try. It couldn’t hurt.
If you’re new to the markets, spend a lot of time on this. It could be your saving grace when times get tough in the months ahead.
Good investing,
Steve
Further Reading
Steve has been an investment professional for 28 years. He's seen Melt Downs before, and he knows how to navigate the fallout. If you missed yesterday's essay about what it takes to survive the Melt Down, check it out right here: Why I'm Worried About You During This Melt Up.
"Having a stock crash on you is part of investing in stocks," Steve writes. And when a position starts to go against you, you need to be sure you have a plan in place... Get the full story here: What to Do When Your Stock Is Crashing.
What happens if things go wrong in an investment? When do you get out? If you're just "winging it," you need to change that right now...
A RECORD YEAR FOR THIS 'RURAL LIFESTYLE' RETAILER
Today, we're looking at a company that's dominating a "niche" market...
As regular readers know, pandemic lockdowns and restrictions have forced many folks to find new ways to fill their downtime. Some have taken to binge-watching their favorite shows and movies on Netflix (NFLX), while others are heading to Lowe's (LOW) for home-improvement projects. Today's company is getting a boost from rural America...
Tractor Supply (TSCO) is the largest "rural lifestyle" retailer in the U.S. It offers a wide range of products, from lawn mowers and gardening tools to outdoor fire pits and ATV accessories... And with many of its customers spending more time outside in their yards, fields, and woods, Tractor Supply has seen increased demand across all its product categories. Sales hit $10.6 billion over the past year – a company record and 27% higher than the year before.
As today's chart shows, TSCO is up more than 70% over the past year and recently hit a fresh all-time high. As long as Tractor Supply remains the one-stop shop for rural America, its success should continue...
