My wife Sandy's investing horror story isn't unique...
Yesterday, I explained how her high-fee active manager drove her portfolio into the ground in 2008. And I know she wasn't alone.
Thousands of everyday Americans watched helplessly as their retirement savings were cut in half – or worse – during the Great Recession.
It was awful. And afterward, many folks made the worst decision they could possibly make...
They sold right at the bottom. Then, they stayed on the sidelines... They wanted to wait to get back in after things had settled down and weren't as volatile. (Of course, that means waiting until after stocks have already recovered... But most folks don't realize it.)
Sandy was more fortunate... She had me at her side. Not everyone has a 30-year Wall Street veteran to lean on, though.
That's why I came out of retirement. I wanted to help out all the folks like Sandy – and anyone else who Wall Street had left behind.
Today, I'll tell you more about the system I created, how it works, and the No. 1 thing you can do to avoid repeating the worst mistakes of 2008...
To save Sandy's portfolio, I first gave her some hard but truthful advice. As I told her...
You have to stay invested. Stocks won't stay down forever. We need to ride this out.
After more than 30 years as a Wall Street insider, I knew that just "stepping aside" and waiting for things to settle down was the worst possible move. That's because of how volatility tends to work after a big crash...
When it comes to the broad market, big volatility up follows big volatility down. A quick glance at the benchmark S&P 500 Index's biggest moves makes this clear...
Major rallies have always come after a big bust.
Most individual investors don't realize this. They don't have a guiding light to keep them on course during market downturns. So they sell at the worst possible times... Then, they miss out on the upside that comes after.
In the end, Sandy fired her portfolio manager and we took things into our own hands... We rolled her retirement into an index fund at Vanguard.
The first priority was making sure she didn't miss the upside in the recovery that was coming... And I knew we needed a plan to keep us steady.
To me, the next step was painfully obvious...
I had spent my career building quantitative tools for Wall Street. And I was darn proud of the work that I had done. With those tools, I had helped many elite investors find success...
But when it came to my wife – and the thousands of everyday investors who had just lost a large chunk of their wealth – well, I hadn't done a whole lot for them.
As Sandy searched for a better solution, I knew that I had the ability and knowledge to fix this problem. So I ended my retirement and got to work...
I went on to build a set of quantitative tools specifically for individual investors. These days, it's called the "Power Gauge"...
The Power Gauge looks at 20 quantitative factors. It's a boatload of data. It covers everything from price performance... to fundamentals... to insider buying trends... to expert consensus.
Collecting and analyzing the data that the Power Gauge uses would take months for most individual investors to do on their own. And that's assuming you even know what to look for and where to find the data.
But fortunately, the Power Gauge pulls all this data together in a matter of seconds...
With the Power Gauge, you just put in the ticker of the stock you're interested in. It pulls all of the data using our 20 factors almost instantly... And it builds a complete report for you.
You can see the readings on each factor that the Power Gauge uses. And even better, you get a simple overall reading – from "very bearish" to "very bullish" – on the stock.
It couldn't be simpler to use. But that doesn't mean it's anything less than professional level.
Most importantly, I designed it to be a guiding light in bad times. And that's what individual investors like Sandy need. To succeed in investing, you've got to have a plan... a process.
The Power Gauge is my process. It levels the playing field. Every day, it helps investors make winning decisions in their portfolios, whether the market is going up or down.
It doesn't have to be what you use. But you need something to guide you in tough times. So form an investment plan, and stick to it. It's the No. 1 way to survive rough times in the markets.
Good investing,
Marc Chaikin
P.S. The Power Gauge is truly the culmination of my life's work. And tonight at 8 p.m. Eastern time, I'm hosting an event to explain exactly how it works... and how you can use to it profit in your own portfolio. I'm even sharing free access to the Power Gauge, so you can see it firsthand. The event is free to attend, but you must sign up first... Click here to learn more.
Further Reading
With news outlets spouting constant market information, it can be hard to know which sources to trust. That's why you need to form a solid plan to help you make decisions no matter what the news is saying... Read more here: How to Protect Yourself... From Yourself.
You're better off preparing your portfolio for a wide range of potential outcomes instead of wasting your time and money betting on specific market events. Check out Dan Ferris' basic strategies for reducing your risk right here: Five Ways to Prepare for Any Market Environment.
Having an investment plan is one of the best ways to survive a market sell-off. And these two tips can help you come out ahead in any market environment...
ACCORDING TO THIS COMPANY, CONSUMERS ARE STILL GOING STRONG
Today's company is painting a bullish picture of the economy...
Regular readers know that looking at financial institutions can be a great way to gauge the health of our economy. When big banks are doing well, it means consumers are busy earning, spending, and investing. And today's company is seeing signs that consumers are getting back to doing just that...
Citigroup (C) is a leading global bank operating in more than 160 countries. It offers everything from credit cards and checking and savings accounts... to wealth-management and investing platforms. And right now, Citigroup says this is the healthiest it has seen consumers bounce back from a crisis in a long time. The company saw record net income of nearly $8 billion in the latest quarter... partially driven by a decrease in the reserves it holds for credit losses. That means Citigroup's customers are having no issues making their payments.
As you can see, shares of Citigroup are up about 120% since their 2020 low. They also recently hit a fresh 52-week high. This is one more indicator that the global economy is growing stronger...
