Has the market found a bottom?
Is it time to buy stocks again?
These are two of the biggest questions I’ve been getting from readers, family, and friends the past few days.
Volatility has been near record-high levels. The coronavirus panic has caused gut-wrenching moves. Some of America’s largest companies lost nearly 30% in value in no time at all… before rallying and then pulling back again. Fear and confusion are through the roof.
So let me answer these questions… right here, right now.
Yes. It is time to buy stocks.
That’s why I released Part 2 of my Crisis & Opportunity Investment Summit last night. For those of you who attended Part 1 a few weeks ago but didn’t make it last night, don’t worry. You can watch a free recording of the event and learn everything I talked about by clicking here.
Last night I got down to brass tacks. My take on the market panic is completely different from what you’re hearing from mainstream financial advisors and the so-called experts.
If you still are not sure where I stand, let me repeat… I believe it is time to get back into the market. Except there’s an important caveat.
There’s one huge mistake that most investors will make when they start to buy stocks again. You can avoid it.
You can’t get back in all at once. You must have a plan to ease in over time.
Take it from someone with over 20 years in the market, who has seen big ups and big downs. The person who tries to be a hero and pick the bottom always loses in the stock market.
Follow the Road Map
The last six week have been unprecedented. The Dow Jones Industrial Average lost 30% of its value in just 22 days. It was the quickest drop in the history of the index. So anybody who feels like they got caught off guard, it’s okay – you are not alone.
But that doesn’t mean now is the time to bury your head in the sand. Instead, it’s time to figure out your strategy to take advantage of the opportunity in front of you. It’s one we may never see again.
That is why I have come up with a road map to help you through the madness. I call it the Road Map to Recovery.
I’ve shared this before, but let me remind you what it looks like…
- Phase 1: Stocks take the gut punch and pull back.
- Phase 2: Stimulus is injected into the economy and stocks begin to build a base and move sideways.
- Phase 3: Stimulus starts to take effect and stocks react – the rally is underway.
- Phase 4: Stocks reach new highs.
Phase 1 was the 35%+ pullback in the Dow. Leading companies lost half their value in weeks. We have taken the brunt of the gut punch and are now moving into Phase 2.
Phase 2 is when the stimulus starts to appear. The U.S. government agreed to a $2 trillion stimulus package. There’s also another $4 trillion in Fed stimulus. That’s $6 trillion in total. That’s a lot of money. And I don’t think it’s all we are going to see.
Then there’s the fact that we have interest rates near historic lows, allowing businesses to borrow cheaply and get back to business as usual. Historically low mortgage rates will allow more people to afford homes and refinance, pumping more money into the economy.
Finally, we have low gas prices. Many folks are already paying $2 per gallon or less at the pump. More money in consumers’ pockets.
During Phase 2, stocks will experience big rallies and subsequent sell-offs until the pandemic hits a peak in the United States. Many of the experts I’ve talked to think that will happen in mid-April.
Phase 3 could be right around the corner – or just in a few months. This is when stocks begin to breakout as the trillions of dollars in stimulus make its way into the economy.
After stocks start to rally, it will be only a matter of time before new highs are achieved – this is Phase 4. I may be going out on limb and against the mainstream media, but I predict we’ll see new all-time highs within 12 months.
Let me be very clear. You cannot wait for Phase 4 to get back into the stock market. It will be too late at that point. Phase 2 is when you need to start buying… and we’re already here.
So if you have not sold, don’t sell now. I can’t predict the market bottom – no one can. But selling at this point would be a big mistake. Once we hit Phase 3 and the stimulus kicks in, you’ll want to have your portfolio set up in the right way to take full advantage of Phase 4… which will have stocks rallying and hitting new all-time highs once again.
What to Do Now
The volatility over the last few weeks has been tough. No doubt about it. But the action has handed us the best buying opportunity in over a decade – and it could turn out to be one of the best in your lifetime.
Irrational selling took over. Strong companies lost more than 50% of their value. Some may struggle to come back. But you can bet that the long-term picture and the mega-trends that we follow here in MoneyWire and throughout my newsletters haven’t changed one bit.
The introduction of next-generation wireless technology will not be stopped. Progress in artificial intelligence will not slow. Electric vehicles will not stop taking market share. And precision medicine and genomics will not stop making huge strides.
The panic that has taken over created prices that we may never see again – ever. And we don’t want to be caught sitting on our hands.
That is why during last night’s summit, I introduced the Crisis & Opportunity Portfolio. It is a portfolio that will allow us to take advantage of one of the greatest buying opportunities of our lifetime. And it holds some of the best small companies in the best industries in position to see the biggest gains over time.
To give you a taste of what I’m talking about, I shared one of my favorite small-cap stocks to buy right now – absolutely free. And I laid out our strategy to capitalize on the massive opportunity sitting in front of us.
You can get all of that – the name of one of the best buys in the market and my Road Map to Recovery – plus get many of your most pressing questions answered by watching the recap of Part 2 of the Crisis & Opportunity Investment Summit.
You cannot afford to miss this. Click here to watch the recording now.
P.S. Not many people have heard of the stock I recommended, but it’s in good position to make big gains over the next several years. I tell you its name and talk more about it in Part 2 of the free Crisis & Opportunity Investment Summit.
Matt McCall’s MoneyLine Podcast
Click here to listen to Matt McCall’s MoneyLine podcast! This week, Matt discusses the latest action in the market. While the market sold off on Friday, things aren’t looking too bad. Is the bear market done? Are there still great deals out there for long-term investors? Matt says there are.
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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