The S&P 500 is down 2.4%. And the tech-heavy Nasdaq is down 3.1%.
If they stick, those are some of the steepest one-day losses we’ve seen in seven months.
Folks in the mainstream press are connecting the skid with the potential collapse of Chinese property giant Evergrande.
Reporters have also blamed the looming debt ceiling clash on Capitol Hill.
But as you’ll see today, we should expect the stock market to be bleeding red right now.
Historically, this has been the worst week in the worst month of the year.
So instead of selling your stocks, consider buying the dip.
That’s what colleague and former Wall Street trader Jason Bodner is urging his readers to do.
That way, they can profit from typically strong gains in the final three months of the year.
Since 1960, the S&P 500 has averaged a positive return in all but two months of the year.
That’s according to figures from Rob Hanna at wealth management firm Capital Advisors 360.
One of these two months is June. But the average loss has been tiny… just -0.01%.
The other is September. It’s averaged a return of -0.59%.
And the average return for the week after the third Friday of the month – this week – has been -0.84%.
So all the net losses for September over the past 60 years have happened this week.
Jason is a true Wall Street insider.
For years, he oversaw billion-dollar trades for institutional investors at financial services firm Cantor Fitzgerald. He was one of the few guys there authorized to make trades that big.
These days, he uses his proprietary trading algorithm to track when institutional money piles into certain stocks. This is how he helps readers at our Outlier Investor advisory “catch a ride” as big-money investors push stock prices higher.
So far, the gains have been massive. His top recommendations in the model portfolio are up 145%… 351%… 379%… 386%… and 711%.
Jason has had a ringside seat to every pullback, correction, and crash over the past two decades. It’s taught him a powerful lesson about how to get rich in stocks…
I started my career on Wall Street just 10 weeks before 9/11. I then watched as Enron and WorldCom collapsed along with the global stock market.
After, I saw stocks recover to giddy new highs. It seemed nothing could bring the market down. But in 2007, greed and leverage in the housing market did just that. Clients of mine were in business one day and insolvent the next. Millions of Americans watched their 401(k)s melt down – including me.
But it all came back because I didn’t sell.
Most investors try in vain to time the market. But Jason knows it’s better to wait it out.
I’m not talking just small falls like we’ve seen today. Big ones, too.
Since the rebound from the 2008 crash, the S&P 500 has gone through 11 drawdowns (peak-to-trough falls) of 10% or more.
It’s also seen two drawdowns of 20% or more.
That’s about the same pace of corrections the market has seen going back to the 1929 crash.
But selling your stocks during these drops would have been a mistake. Take a look…
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Each time the S&P 500 has fallen, those who were patient have been rewarded as companies’ operating performances turned around and share prices rose again.
As I’ve been showing you, it’s normal to see negative returns in September… particularly this week.
And as Jason showed readers of our Bleeding Edge e-letter, we’re heading into the best three months of the year.
He looked at fourth-quarter returns for the Dow, the S&P 500, and the Nasdaq from 1990 to 2020. And as you can see in the next chart, the future looks bright…
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That’s why buying the dip makes sense. I’ll leave Jason with the final word on that…
The end of the year shows us a promising picture. So we should buy any dips in the coming weeks. History suggests that when things look ugly… it’s precisely when we want to be brave and buy.
This can make for terrific gains. And I am confident stock prices will be higher in the coming years – and certainly in the coming decades.
Jason says a great way to take part in those potential gains is to invest in growth stocks through the iShares Russell 1000 Growth ETF (IWF).
It holds lots of Apple (AAPL), Facebook (FB), Amazon (AMZN), Microsoft (MSFT), and Google (GOOG) shares. It’s also filled with smaller growth stocks like the ones Jason focuses on at Outlier Investor.
Regards,
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Chris Lowe
September 20, 2021
Dublin, Ireland