Lessons from Past Panics: A Great Time to Buy

I’m a born optimist. I invest the way I do, and recommend the stocks I do, because the future is going to be so exciting.

All of the trends we talk about in MoneyWire and my subscription services – 5G, the Internet of Things (IoT), artificial intelligence, personalized medicine – are going to make the world better.

It’s a tremendous time to be alive and watch the world change again, just like it did at the dawn of the internet and personal computers…

But I understand why some folks are not feeling that way right now.

Stocks bounced on Friday after Thursday’s huge sell-off. But I can’t tell you the volatility is over.

Even for those who are not sick and may not even know anyone who is, the coronavirus has created a wave of anxiety that’s rippling across the world.

Stocks have plunged into bear market territory, and there is no denying the magnitude of the selling taking place.

But I’m STILL optimistic.

Today I’m going to explain why investors should be, too. Even if you’re a born pessimist, stock market history shows that now is a great time to be in the market! And you’re going to hate yourself if you miss it.

What a Recovery Looks Like

I’ve been navigating the ups and downs of the markets for 20 years, and this downturn is following some familiar patterns.

On March 9, 2009, after the S&P 500 lost 50% of its value and destroyed millions of Americans’ retirement savings, I went on Fox Business and told viewers to put money in stocks. Had you gotten into stocks on the day I went public with my research, you could’ve captured the entire gains of the bull market that followed.

So here’s what’s clear to me right now…

This moment represents one of the greatest buying opportunities you may see in your lifetime.

The coronavirus is a short-term issue for the economy and stocks, and both will recover.

I’ll talk more about this in my Crisis and Opportunity Investment Summit on Tuesday, March 17 at 7 p.m. ET (click here to register for this free event now), but let me give you a sneak preview here.

Stocks will go through a typical recovery cycle that should look something like this:

Phase 1: Stocks take the gut punch and pull back.

Phase 2: Stocks move sideways for a few weeks/months. Then stimulus is injected into the economy.

Phase 3: Stimulus starts to take effect and stocks react, rallying big time.

Phase 4: We reach new highs.

I don’t know how long Phase 1 and Phase 2 will last.

What I do know is that it could turn to Phase 3 at any time, perhaps even on a moment’s notice. That’s why you don’t want to panic sell. And it’s why buying now is the best strategy. Even if stocks drift sideways or remain volatile for some time, history shows that stocks are poised to rally in the near future.

I have studied the history of the U.S. stock market. I don’t know everything, but I do know that every single time this type of dramatic sell-off has occurred, it has created a great long-term buying opportunity.

What Past Panics Teach Us

There have only been two times in the history of the VIX – the most widely followed volatility index – when it has reached current levels.

The first was on October 19, 1987, otherwise known as Black Monday, when the Dow fell 22.6%. The other time was during the financial crisis at the end of 2008.

Both were horrible at the time. But guess what? History shows that those were two of the greatest long-term buying opportunities for stocks – ever.

When fear is this high, it is a sign that people are emotional and making poor decisions.

For example, take a blue chip stock such as Amazon (AMZN). The go-to online retail platform hit a high of $97.93 on January 2, 2008, only to fall 64% by November 20. It has since climbed an amazing 5,180%!

Or Intuitive Surgical (ISRG), the robotic surgery powerhouse. On December 10, 2007, the company reached a high of $119.86 and then slid for a while toward a low of $28.29 on March 3, 2009. That’s a 76% plummet. Investors who got in then reaped the benefits as the company rallied 1,720%!

Keep in mind that these were relatively large companies that already had market caps of $1 billion or more at the lows I mentioned.

For days or months on end, they slid sideways while the market panicked – until buyers realized their mistake and came roaring back, handing life-changing gains to those who bought in at the lows.

I can cite dozens of examples of amazing, quality stocks that got hit by irrational selling… and then came back to make their investors rich!

And we’re going to follow that familiar pattern again.

I know that this week has been a real punch in the gut. But I believe in American ingenuity and that the future is going to be better – not just for America, but for the world!

We’ll get through the coronavirus pandemic – like we have made it through other crises in history. What’s more, the economy was on solid footing before the virus hit, making the recovery likely to be stronger and faster.

The smartest investors are already thinking ahead. You can’t afford to miss out on some of the stocks that are going lead the way into the future while they are sitting at discount prices.

That’s why I’m currently working on a presentation to help guide you. I invite you to join me on Tuesday, March 17 at 7 p.m. ET for the Crisis and Opportunity Investment Summit.

At this free event, I’ll explain why I’m still so optimistic about the future. I’ll also tell you which stocks I think can make you rich as we enter Phase 3 and the markets start to rally back toward new highs!

You can reserve your spot now by clicking here. I hope you will join me then.

Matt McCall’s MoneyLine Podcast

Click here to listen to Matt McCall’s MoneyLine podcast! This week, Matt talks about everything from past pullbacks to recessions to the coronavirus and its role in the stock market emergency. We headed into this new bear market fast. Fear and panic selling are at all-time highs – but fear isn’t the answer. And that’s why Matt is sharing his top five tips for profiting during a bear market. He also shares advice for millennials investors, his thoughts on the Robinhood trading platform, and possible growth opportunities for long-term investors.

You can subscribe to this podcast on iTunes, Stitcher, Spotify, or wherever you listen to podcasts.

Learn where Matt McCall sees
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