This is one of the most uncertain periods in market history...
I know plenty of smart market-watchers and professionals who say we're on the verge of a sudden and dramatic decline. It could happen today... tomorrow... or several months from now.
Others say the market could go up 50%, or even 100% or more from here before it tops out. That's a massive move... and one that you don't want to miss. It could mean the difference between a bargain-bin retirement and one where you never need to stress about your everyday expenses.
Both sides have reams of data and truly compelling evidence to support their positions.
And here's something else they have, which makes it even harder to make sense of this market...
When market watchers and financial "gurus" talk about markets making dramatic moves (up or down), they tend to do so with a great deal of emotion...
And that's not good for average investors.
Most of us are hardwired to follow the herd...
A part of the brain called the amygdala drives this response. It consists of two tiny structures deep in the brain that connect emotions and fear. This is the so-called "fight or flight" system.
When individuals don't follow the crowd, their amygdalae start firing. It makes them feel nervous... even sick to the stomach. This was useful in prehistoric days. There was safety in numbers when trying to avoid predators. But it will lead you astray when investing...
I saw exactly this during the market collapse in 2008.
On September 29, 2008, the Dow Jones Industrial Average fell nearly 7% in one day... Investors left the market in droves. By the end of 2008, trillions of dollars were pulled from the stock market.
Within a few months, a new bull market began.
If you threw in the towel and sold your stocks on the way down, or near the bottom in spring 2009, you weren't alone. Many otherwise sensible people did. They were simply following their hardwiring...
And most of these same people waited far too long to get back into the market too. So even though they've done well the last few years, they're probably kicking themselves for missing out on the really big gains.
Since 2009, the entire S&P 500 Index has returned 300%, including reinvested dividends.
I don't have a crystal ball. I don't know where the market is going next. But I do know how to protect your portfolio from a market decline... and keep invested for the majority of any remaining market upside.
For the past seven years in my Retirement Trader letter, I've shown regular investors how to make this bull market work from them. We've collected safe and steady income on some of my favorite stocks. In fact, we've closed winning positions more than 94% of the time.
We've racked up these consistent winners by selling options. This has been our go-to strategy... our single-best way of "trading for income" in retirement.
But today, we're reaching back into our trading toolbox. We have entered a period which could turn into one of the best times to not only sell options, but buy options as well.
This is a different way of trading that can be very powerful. This strategy can bend the market to your will and protect you from a correction. Simply put, here's what this trade does...
- It protects your holdings against a market decline,
- It allows you to profit from the upside of stocks, and
- It prevents you from paying a big tax bill on your profits.
Around here, it's a trade that I like to call "Eifrig Insurance." And it's a way of protecting the stocks in your portfolio from a dramatic crash, while still enjoying the majority of the market's remaining upside.
Best yet, this trade doesn't cost us anything other than commissions. In fact, most of the time you can get paid to put on this trade – enough to cover any commission and have more left over. And it's particularly effective when the market has been on a long bull run and valuations aren't cheap anymore... like what we're seeing right now.
You can put on this trade on almost any major stock that you likely have in your portfolio. And I've put together a step-by-step guide on this strategy... with a list of some of the most popular stocks in America on which this type of trade makes sense.
I'll bet you own at least five – maybe even a dozen or more – of these stocks. And if you're nearing retirement and sitting on significant gains, you don't want to give those gains back... but you also don't want to incur a big tax bill by selling those stocks now and missing out on more upside if this bull market continues.
If you're interested in insuring your portfolio from a market correction, while also taking advantage of the end of the bull market, click here to learn more. (This does not go to a long video.)
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Retirement Millionaire Daily Research Team
Vancouver, British Columbia
September 20, 2017