Why I’m Not Worried About Market Pessimism
“It’s a terrible time to invest.”
“Stocks are way overextended.”
“The global economy is slowing. The probability of making money is low.”
It might sound like I’m talking about current market conditions. But this was actually what one of my trader buddies said to me in January 2011 when I told him I was launching a wealth management firm.
He wasn’t alone.
It seemed like everyone thought my idea was foolish and it was a terrible time to lead a group of investors into stocks. That bearish sentiment was apparent in the American Association of Individual Investors (AAII) Sentiment Survey at the time. In early 2011, bearish sentiment spiked to 34%, which was above the long-term average of 30%.
But they were all wrong.
Since then, the S&P 500 has proceeded to deliver one of the best returns in history, climbing more than 55% in less than five years.
Investors who were buying in the face of pessimism have scored huge gains, but investors who sat on the sidelines and hoarded cash missed out on a narrow window to buy low.
That conversation with my buddy back in early 2011 reminds me of the current market environment.
The headlines are once again splashed with pessimism. The global economy is still growing, but at a slower pace than recent years. And investors are once again bearish.
This is the top reason I am optimistic about the S&P 500:
Bull markets do not end when investors are bearish. They end when investors are bullish.
This is a phenomenon that has played out time and time again in the market. The Tech Bubble and the housing bubble are two terrific recent examples.
In 2000, at the height of the Nasdaq tech bubble, everyone and their grandmother was trading tech stocks. Back in 2005 at the height of the housing bubble, investors were gaga over real estate. It was the asset class that “never goes down.”
We know how both of these stories ended.
Investing while optimism was high led to huge losses. Investors who understand what that bullish sentiment meant kept their powder dry for another day.
Today, market volatility is at multi-year highs. That makes right now one of the best times to sell options in years. Why? Because the more volatility the market experiences, the higher the profitability of trades I recommend in my Income Multiplier advisory.
The word “options” can be scary, but keep in mind, there’s a reason even notoriously cautious investors like Warren Buffett use them. They can be an effective tool to reap large gains in short periods of time without an increase in risk.
That’s why, starting on Tuesday of next week, I’m conducting a special free video series that shares a new way of trading that lets you “withdraw” cash from the market every nine days no matter what the market does. It’s already produced up to $3,167 every month I’ve used it — with very little risk.
I have hundreds of readers who have been using it with me since March 2014, and they haven’t experienced a single losing recommendation.
They’ve closed 60 out of 60 winning recommendations once every 9 days, on average, with average profits of about $885.50 on each trade.
I’m so excited about this strategy that I’ve spent the last few months creating a training series that shows you step-by-step how you can use it too.
The first session of this free 3-part training series is available now. The series continues on October 7th and wraps up with a special final event on October 8th.
To view the first webinar in this life-changing free training series, click here.