How To Profit In Any Market
On February 17, 2011 the S&P closed at 1340.43. Today, July 6, 2011 is almost five months later and the S&P is at 1339.22. It’s gone practically nowhere which means your IRA or 401K has probably also gone nowhere (go check your statements).
During this same time period, my portfolio has risen over 50%. How was I able to do this?
First, if you take a look at a chart of the S&P 500 you will see the market didn’t move sideways for five months, but rather had a series of ups and down and has now ended back in the same spot it was five months ago.
Those investors following a “Buy & Hold” strategy have just wasted five months of their life for no gain. The secret to big gains is to play the ups and downs of the market! Here is how it works:
First we need a vehicle to invest in. Now since most stock investors think of “stock” as an investment vehicle, the sad fact is.. about 25% of stocks will move in the opposite direction of the markets. If you are investing in stocks while the market is rising, there is no guarantee your stock will rise also. But what if there was a guarantee?
Enter the ETF. Exchange-traded funds (ETFs) are innovative investment vehicles. They are built like mutual funds and trade like stocks. For example, you can buy an ETF that mimics the S&P 500. So when the S&P gains 5%, that ETF will also gain 5% (or close to it). It’s what we call a sure thing. Everytime the market goes up, your ETF will also go up. You can’t say the same about stocks.
But wait. It gets even better. You can also make money when the markets drop. In the old days that meant “shorting” stocks which left you at the mercy of your broker if the trade goes wrong. You could lose it all. Extremely risky.
Today, there is what’s called an “inverse” ETF. This ETF goes up when the markets drop. You trade these just like a stock so it’s easy to profit when the markets fall.
Now that you know how to profit in up and down markets, now it’s time to supercharge your returns. To do this you invest in a “leveraged” ETF. These currently come as 2x and 3x. For example, if the S&P rose 5%, your 3x ETF would rise 15%. How sweet is that. The same goes true for Inverse ETF’s.
To sum it all up. Simply buy an ETF (TNA, UPRO, BGU are some) when you feel the markets are rising. When you feel the markets will fall, invest in an Inverse ETF (BGZ, SPXU, DOG, plus many more).
The only thing you’ll need to master with this trading strategy is timing. How good are you are telling when the markets will fall or rise? There are big returns to be made if you are good at market timing.
If you are like most investors you are always getting in and out at the wrong time.
All is not lost. You can subscribe to my stock alert service and I’ll email you when the markets are about to rise or fall (about 14 times a year). I’ll even inform you which ETF to be in at any given time.
If you would like to consistently out gain the markets (I’m currently up 63% in 2011 vs the S&P’s 6%) than I urge you to join me today by clicking the link below:
Click to learn more about my profitable ETF investing strategy.
