Wall Street is making history right now. We’ve seen some of the biggest drops ever, but we’ve also seen just how explosive the gains can be.
I’m confident that the market has a lot more records to break in the coming months. And unlike some of the gloomy milestones we’ve seen in the past several weeks, investors could set a new standard for profits.
But before I make the case for why this is, let’s take a look at a few of the numbers that caused jaws to drop in the last month:
- The Dow saw its worst week ever from October 6th to the 10th, losing more than 18%. Even scarier was that the week was part of a larger eight-day decline that dropped 22%.
- The market turned around quickly on October 13th in the biggest buying party in history, with all major indexes up more than 11%.
- After standing pat for a day, the bottom fell out on October 15th, when the Dow and S&P suffered their second-worst declines ever. The drops of more than 9% were behind only Black Monday in 1987.
- On October 28th, the day before the Federal Reserve’s meeting, investors around the world breathed a sigh of relief as stock markets staged a long-overdue rebound from the sell-offs of the past several weeks. The Dow closed up 10.9%, or 889 points, the second-largest single-day gain in history.
I’ll be the first to admit that there are a host of challenges still ahead for the U.S. economy. But if you look past the unsavory headlines, there are signs of recovery taking shape.
Believe it or not, the government’s massive intervention wasn’t all for naught. The credit markets are beginning to thaw thanks to all the liquidity the Federal Reserve, the ECB and other central banks have injected into the global banking system.
As a result, LIBOR rates have fallen, which indicates that banks are slowly starting to trust each other again and are less afraid to lend freely.
So the dust is officially settling, but what does this mean for investors?
>
Simply, it means a market rebound is just around the corner. And when it arrives, I am confident that fundamentals will rule the day. Now that financials have flamed out, they won’t cause anymore distractions.
Wall Street will race to buy up fundamentally strong stocks that will surge when buying pressure returns as the trillions in idle cash floods back into the market.
Let me break it down for you:
Panic selling has been the name of the game on Wall Street in the past month. Investors naively thought if they cashed in their chips after weeks of severe declines, they’d be "playing it safe."
Well, they thought wrong. Instead of waiting for a turnaround, they locked in major losses and got burned. In fact, the massive sell-off has left many healthy stocks—the stocks that have successfully grown their earnings—oversold! (See also: "Top 5 Stocks for November.")
Companies are currently trading at record low price-to-earnings ratios, and it would be unfortunate if investors missed the opportunity to scoop up these great stocks at a discount.
Right now, my Blue Chip Growth subscribers are positioned to cash in from Wall Street’s resurgence. We’re bouncing along the bottom of the market right now, and even though we could still retest the low, all it takes is one little spark to trigger a massive buying spree.
As I indicated earlier, investors are ready to move past the credit crisis instead of lingering on it. And right now, investors are sitting on $3.5 trillion in cash. Once the fuse is lit, that cash will come flooding back into the market and the stocks on my Blue Chip Growth Buy List will be the first to surge ahead thanks to their superior earnings growth and fundamental strength.
Hindsight is 20/20. In a few years’ time, investors will look back on these months as the defining moment of their investing life. You’ll be kicking yourself if you miss it.
Don’t miss out on this buying opportunity of a lifetime. Click here to try a risk-free trial to Blue Chip Growth today and position your Buy List ahead of the boom!
