How You Should Handle the Market’s “Sucker Punch”

Timeless Wisdom from Mike Tyson Published By Money & Markets, LLC. August 06, 2024 Published By Money & Markets, LLC. August 06, 2024 [Turn Your Images On] [Turn Your Images On] From The Desk of [Adam O'Dell]( Editor, [Money & Markets Daily]( How You Should Handle the Market’s “Sucker Punch” Money & Markets Daily, Back in September 1987, Mike Tyson was still just an up-and-coming young prizefighter… one with an undefeated 31-0 record. At just 21 years old, it was already clear that Tyson was one of the greatest brawlers ever to set foot in the ring. But skeptics still doubted Iron Mike’s ability to strategize. The media pressed him about his next opponent, Tyrell Biggs, in particular. Biggs was a super heavyweight Olympic gold medalist. A master tactician in the ring. Reporters asked Tyson if he was worried about Biggs’ “fight plan.” Tyson responded with the now-legendary quote: “Everybody has a plan until they get hit.” Well, just yesterday, the stock market took a Tyson-sized hit. Now it’s time to see whether investors have what it takes to remember their plan… A Body Blow for Investors Across the Board Yesterday’s rout began overseas in Japan. The country’s Nikkei 225 index sank 12%, closing out its worst day since 1987. The panic quickly spread to Europe before hitting American futures markets, with the Dow Jones Industrial Average opening 1,000 points lower Monday morning. The Nasdaq sank to a level not seen since May, and the S&P 500 was down 3%. The sell-off has been linked to renewed fears of recession and profit-taking among the so-called "Magnificent 7" stocks. Over the weekend, news broke that Warren Buffett sold off more than half of Berkshire Hathaway’s position in Apple, with many other investors clearly following suit. If we zoom out to look at the bigger picture, it becomes clear that Monday’s sell-off was “shocking but not surprising.” If you’ve been following my articles here and in Banyan Edge, then you’ll know I’ve been warning readers about the perilously high valuation of Mag 7 stocks for [over a year now.]( By weight, these seven stocks account for nearly a third of the S&P 500. So when their shares are rising, the index typically does well. But when investors turn to profit-taking, things can go south quickly (like we saw yesterday). But even though Mag 7 stocks were among yesterday’s biggest losses, they weren’t alone. One key metric I always keep my eye on is called the “Advance-Decline Ratio.” And during yesterday’s sell-off, 23 stocks were sinking lower for every single stock rising higher. That kind of near-universal downturn often coincides with capitulation. Investors throw up their hands and say: “Dump everything.” After that point of maximum pessimism, stocks start to turn around. While it’s never easy to deal with a 3% down day, our long-term investing plans haven’t changed in the slightest… Mega Trends for 2024 and Beyond Instead of index investing or Mag 7 stocks, my Green Zone Fortunes investing strategy is built around the concept of mega trends. These mega trends are powered by towering demand in some of the stock market’s hottest industries — from artificial intelligence to semiconductors and the $6 trillion global energy market. But then we drill down into a specific niche within these powerful mega trends, further stacking the odds in our favor. At the end of the day, I’m still using the same traditional buy-and-hold strategy you’ve probably used throughout your years of investing. I’m still recommending specific stock investments. But since each stock is part of a broader mega trend, we need to have a degree of patience. In short, we must be willing to ride the minor ups and downs in the broader stock market … for the chance to make lucrative, longer-term profits on these mega trends. Of course, that doesn’t mean we simply “hold and hope.” --------------------------------------------------------------- [Turn Your Images On]( [“Titan of Tech” Bets Big on Tiny AI Company]( He’s made as much as 3,250,000% in just three years on companies like Facebook, Airbnb and PayPal…  But our research shows his latest investment could be his most successful venture yet.  [See how you can invest alongside him]( (with a starting stake of just $25). --------------------------------------------------------------- Managing Risk and Keeping Your Cool Discipline is one of the greatest advantages in the professional trader’s arsenal. Since most professionals are trading with “house money” and not their own hard-earned savings, they’re better suited to stomach a short downturn without giving in to the urge to sell. But you can follow suit with a defined trading strategy to help maintain your discipline. That’s why we publish stop-loss exit strategies for most of the positions we add to our portfolio. Not all of our positions work out as we expect them to. But with well-defined stop-losses, you're pricing in your exit plan just in case markets sour on the stock. Rest assured that my team and I monitor the market’s health every day. We keep a close eye on our stop-losses. And of course, we’re always on the hunt for new opportunities. We aren’t letting a pullback in the S&P 500 scare us out of compelling opportunities in lucrative mega trends! Here’s What You Should Do Now Just follow your risk management. Sit tight, stay calm and follow your plan. That’s all you need to do. If you’d like to see how I’m navigating this market, check out Green Zone Fortunes. I’ve mentioned mega trends a few times throughout this story, and it’s for good reason. These are the areas of the market that are driving future growth. Just look at AI… Even with this recent sell-off, many AI-related stocks are still up double-digits (even triple in some cases) in 2024 alone. In fact, the AI stock we're tracking in Green Zone Fortunes recovered quickly and popped 10% Monday night following the sell-off. To see why I believe this stock has plenty of room to run even higher, [click here to watch my special presentation.]( To good profits, [Adam O'Dell]( Editor, [Money & Markets Daily]( --------------------------------------------------------------- Check Out More From Money & Markets Daily: - [YOU CALL THIS A “SOFT LANDING?!”]( - [3 SURPRISING TIPS FOR FINDING 10-BAGGER STARTUP INVESTMENTS]( - [RED-HOT F1 SEASON, BUT A CAUTION FLAG FOR FWONK]( --------------------------------------------------------------- [Turn Your Images On]( Privacy Policy The Money & Markets, P.O. Box 8378, Delray Beach, FL 33482. 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It may contain errors and you should not base investment decisions solely on what you read here. It's your money and your responsibility. Nothing herein should be considered personalized investment advice. Although our employees may answer general customer service questions, they are not licensed to address your particular investment situation. Our track record is based on hypothetical results and may not reflect the same results as actual trades. Likewise, past performance is no guarantee of future returns. Certain investments carry large potential rewards but also large potential risk. Don't trade in these markets with money you can't afford to lose. Money & Markets permits editors of a publication to recommend a security to subscribers that they own themselves. However, in no circumstance may an editor sell a security before our subscribers have a fair opportunity to exit. Any exit after a buy recommendation is made and prior to issuing a sell notification is forbidden. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication. (c) 2024 Money & Markets, LLC. All Rights Reserved. Protected by copyright laws of the United States and treaties. This Newsletter may only be used pursuant to the subscription agreement. Any reproduction, copying, or redistribution, (electronic or otherwise) in whole or in part, is strictly prohibited without the express written permission of Money & Markets. P.O. Box 8378, Delray Beach, FL 33482. (TEL: 800-684-8471) Remove your email from this list: [Click here to Unsubscribe](