There’s nothing you can do but bleed red in a bear market…
That’s what the talking heads on TV want you to believe, at least. And it’s no surprise…
The networks they work for are in the business of keeping ratings high. And fear keeps viewers glued to their screens.
And there’s some truth to their claim…
If you’re a buy-and-hold investor, you’re going to take a temporary hit to your wealth in a bear market.
Since the start of last year, the S&P 500 is down 16%. The tech-heavy Nasdaq has fallen 31% since it reached an all-time high in November 2021.
And once high-flying tech stocks are down 70%… 80%… even 90%.
Things haven’t been this bad since the trauma of 2008.
But as I’ll show you today, the media is dead wrong about bear markets.
I’m not saying bear markets aren’t scary. They can be. But they don’t mean you have to give up on your dream of financial independence.
If you use the right strategy they’re opportunities to make triple-digit… even quadruple-digit… gains.
Jeff Clark’s decades-long track record shows this is possible…
As regular readers will know, Jeff’s been a professional trader for more than four decades.
He used to manage money for celebrities and Silicon Valley moguls. Now, he helps everyday folks build wealth with these strategies at his Jeff Clark Trader advisory business.
You’ll often hear me call Jeff our “bear market guru.”
He probably wouldn’t like the guru part. He’s too down to earth for that. But Jeff has notched some of his biggest wins in in bear markets.
For example, he closed four trades for a gain of 1,000% or more after the dot-com crash in 2000. These included a 1,391% in 78 days… 1,263% in 68 days… 1,007% gain in 42 days… and 1,285% in 48 hours.
And eight years later… in the teeth of a global financial crisis… he did it again.
2008 was a doozy…
The housing market crashed nationwide for the first time since the Great Depression.
This caused the collapse of the Bear Stearns and Lehman Brothers. And it threatened to take the whole financial system down.
More than 2 million Americans lost their job in the recession that followed.
And the stock market got crushed. Peak to trough, the S&P 500 plunged 57%. Most folks yanked their money out as fast as they could and hid out in cash and T-bills.
Not Jeff… The massive wins he notched following the dot-com crash told him he could make a lot of money during market panics. And that’s what he did…
At the time, he headed a trading advisory called the S&A Short Report with our colleagues at Stansberry Research. And instead of panicking along with the crowd, Jeff put his experience to work to help his readers profit.
Boy, are they glad he did!
As the worst of the crisis raged, Jeff gave them the chance to score more than 40 trading wins.
Apologies if you’ve heard me say this before. But his track record is one of the record books.
Newsletter industry legend Porter Stansberry was Jeff’s publisher at the time. Here’s what Porter wrote on January 29, 2009…
Jeff’s trading this year in The S&A Short Report was nothing short of heroic. He made 52 recommendations – all of them short-term trades. Out of these, 42 made money. A win rate of more than 80% in options trading is ridiculous. The average return on every trade was a bit more than 31%.
That’s outrageous when you understand the short duration of these trades and the turnover in the portfolio. How outrageous? The cumulative total return was greater than 1,700%.
Of those 42 winners in 2008, 10 were triple-digit gains.
And that wasn’t some fluke …
Jeff did it again during the pandemic-induced crash that took the S&P 500 down as much as 33% in early 2020.
That was a difficult… even frightening… time for all but the most seasoned buy-and-hold investors.
I know because my parents, both in their 70s, pulled all their retirement money out of stocks in March 2020. They couldn’t bear seeing their savings getting walloped like that.
But as the turmoil raged, Jeff gave his subscribers the chance to profit more than 50 different times – with gains of 142%… 156%… 173%… even 333%.
The best part is he did it all without taking extreme risks…
I’ve known Jeff personally for years. We’ve met regularly at the various Legacy Research conferences through the years.
And contrary to the popular idea of traders as big risk takers, he’s a conservative guy.
He’s built his trading advisory business on strategies that help him earn outsized gains without taking on outsized risks.
He does that by following three rules…
Rule No. 1 – Trade with only 10% of your portfolio
Jeff recommends trading with no more than one-tenth of your investable wealth. Put the other 90% in cash, bonds, buy-and-hold stocks, and other long-term strategies.
This is a vitally important guardrail you must have in place before you start trading. Trading can be hugely rewarding. But the only way to last as a trader is to be ruthless about keeping your downside low.
Rule No. 2 – Look for asymmetric trades
Prudent speculating means making trades only when the potential reward outweighs the potential risk. We call them asymmetric trades here at Legacy.
The buy-and-hold investor puts $100 risk for the chance at making a $10 gain. An asymmetric trade allows you to put just $10 at risk for the chance of a $100 gain.
You can afford to have more losers as an asymmetric trader, because the size of your winners makes up for them.
Rule No. 3 – Never overleverage a trade
Jeff recommends his subscribers limit the amount they put at risk on each trade.
A rule of thumb is to put no more than 1% of your account into any one trade.
If the trade goes against you, you’ll live to fight another day. And if it goes your way, you could earn triple-digit profits in a short time.
I’m not saying bear markets are good news for everyone…
If you’re not prepared, they’re extremely challenging.
But as Jeff has shown over his career, they can be surprisingly profitable for folks who know how to trade them.
So, if you’re already a Jeff subscriber, make sure to pay special attention to his recommendations over the coming weeks. Now is a great time to be a trader because we’re seeing such big moves in stocks.
And if you’re not already following him, tune in to his webinar tonight at 8 p.m. ET.
I won’t steal Jeff’s thunder. But it has to do with a historic reset coming to the U.S. stock market.
Anyone can make money during a bull market. But it’s what you do in those last precious moments of a bear market – those “reset” moments – that have the potential to bring you life-changing gains.
So, if you haven’t already, go here now to automatically reserve your spot.
Regards,
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Chris Lowe
Editor, The Daily Cut