Most investors tend to screw up in bear markets...
The classic mistake is to keep holding on to their sinking stocks all the way to the bottom. But even prudent investors can get it wrong.
Let's say you're disciplined about following your sell stops. You exit your positions as your stops are triggered. That leaves you safely in cash as stocks keep falling.
The only problem is that you can't have your money parked on the sidelines forever...
Eventually, you have to get back in the game and buy stocks. Your money has to work for you. Over time, markets will rebound.
The best investors use bear markets to their advantage... Amid the chaos, they scoop up world-class businesses on the cheap.
We want you to be this type of investor. And that's why we think everyone should have a bear market hunting list or, as we call it, a "Stubborn List."
A Stubborn List is a collection of businesses you've liked but never bought because you were too hardheaded to pay a premium valuation. And then, you've watched those stocks continue to rise.
When a bear market hits – like it has recently – you pull out your Stubborn List to buy these great stocks at depressed valuations.
Now, this strategy doesn't work if you are a trend follower or wanton speculator. For example, many of the tech stocks that got trashed in the first half of the year deserved to be trashed.
Just because a stock is down 50% doesn't mean it's a deal – it can simply mean the previous price was wrong.
But when you've got a true quality business that dominates its competitors, earns real profits, and still has a mega-growth runway... then a decline in its share price can be a real opportunity.
If you're on the hunt for such opportunities, I urge you to watch the recent presentation from my colleagues Marc Chaikin and Joel Litman.
Last week, they revealed what they call the "perfect stock."
It's a never-before-seen recommendation and approach that could realistically make you 5 times your money from here no matter what is troubling the overall stock market.
Their criteria for these perfect stocks are so demanding that after scanning 32,000 unique investments over the past 10 years, only 133 stocks have ever earned the title of "perfect."
Now, here are some of the things on your minds this week... Keep sending your comments, questions, and topic suggestions to [email protected]. We read every e-mail.
Q: I am a firefighter for over 24 years. I have pretty substantial experience with falls, especially involving elderly folks. Here are some items I share with folks in the community I serve:
1. If you have a fall, even a seemingly insignificant one, and you take a blood thinner, seek medical attention. This is especially true if you have hit your head. A CT scan is probably needed to rule out bleeding that could be dangerous.
2. Ditch the throw rugs. These things are trip hazards... period. Put on some socks, with added traction grips, if your floors are cold.
3. If you have been prescribed or issued a walker or cane, USE IT! Use it even if you are just going to the bathroom, or getting something to drink, etc. Plus, walkers often have a storage pouch. Keep your phone in it so your hands can be free to assist with your balance and hold onto the walker. Your doctor gave you that thing for a reason.
4. Be honest about your pet's behavior. If you have a dog that is a trip hazard, figure out how to manage that concern. Consider some pet training classes.
5. Lastly, I'll agree with Doc's advice, make sure you are walking and getting around all the time, consistently, every day. Keep moving and stay healthy.
Thanks, Doc. – G.S.
A: Thanks for sending in these tips, G.S. Hopefully some of our readers will be able to use these to reduce their fall risk.
Q: Can you explain the benefit of fiber? – F.H.
A: There are two forms of fiber: insoluble and soluble. Your body can't break down insoluble fiber, but it helps food and waste move through your digestive system. Soluble fiber helps slow the absorption of sugar, meaning your blood sugar won't spike as much.
One study in the New England Journal of Medicine demonstrated that people on a high-fiber diet (50 grams of fiber per day – the equivalent of 11 apples) had 10% less sugar in their blood than those on a moderate-fiber diet (half that amount). The high-fiber diet also provided three times more soluble fiber in particular.
In addition, the researchers in that study pointed out that they used unfortified, truly natural-state foods. That means none of those "fiber added" products or supplements.
The best way to add fiber to your diet is to start including natural sources in your meals. But remember, there are good and bad sources of fiber. Good sources include split peas, black beans, green peas, and raspberries. Bad sources include any processed foods and baked goods that also contain loads of starches and sugars.
What We're Reading...
- Did you miss it? A recession warning sign has flashed.
- Something different: Want to live longer? Drink coffee.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
September 30, 2022