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Now is NOT the time to sit on the sidelines.
In fact, now’s the time to back the truck up and start buying.
If you wait for the economic news and sentiment to get better, you’ll be too late.
The reason is simple: The stock market is a leading indicator. It turns higher before news gets better.
If you wait for an “all clear” sign that it’s safe to get back into stocks, odds are you’ll miss the bulk of the next move up.
That’s why most investors sat out the longest bull market in history.
It started on March 6, 2009, when news went from bad to terrible.
The S&P 500 Index fell to a multiyear low of 666 — down more than 50% — and corporate and economic news became dire. But that’s also when the stock market turned and soared higher for the next decade!
Investors who waited kept waiting … and they missed out on huge gains.
Don’t make that same mistake. Because when the stock market begins to rise, it happens very quickly.
That’s why I want to share with you three exchange-traded funds (ETFs) that should outperform over the coming years. All three are in industries that have strong tailwinds pushing them higher.
To find out what they are — and why now’s the time to buy — check out my video below:
Now’s the Time to Play the Long Game
If you’re a short-term investor in this type of market, you’ve got your work cut out for you.
Right now, you’re trying to buy stocks whose prices are reacting to news of the coronavirus curve and the economic shutdown.
And that means most other investors are buying and selling shares of those stocks based on emotion — not business fundamentals.
That’s not the way you make money in the market.
Instead, you want to find companies that will weather this storm over the long term — and then use this price volatility to buy stocks while they’re cheap.
That’s exactly what I’m showing readers of my Alpha Investor Report newsletter how to do.
And I want to help you do the same.
For more information, watch this special presentation that I put together for you and find out how to sign up for Alpha Investor Report today.
This Historic Market Turmoil Will Be Remembered
Keeping reading because at the end of this article I’m going to share three ETFs to buy in the 2020 stock market turmoil.
We will talk about this moment for decades to come. The stock market has been absolutely volatile.
From the market highs of February 19 to the low of March 23, the market fell 34% — the quickest bear market in history. Then, three and a half weeks later, it rose 28%. And now looks like it’s turning back down again.
The stock market is going through a rough patch, but eventually stocks will rebound. And if you want to learn how to profit from the rebound, you can subscribe to the Alpha Investor Report.
If you are a short-term investor in this type of market, you have got your work cut out for you. Emotion is moving stock prices and trading off the COVID-19 curve — how many cases there are, how many deaths, the curve flattening etc.
The country is on shutdown. People are shut up in their houses. Businesses are being shut down throughout the country. Non-essential businesses have been closed for the last month or so. Public companies are not even giving guidance anymore. Business is curtailed.
The future is extremely uncertain.
A savvy investor should ask: what the hell are prices trading off? What are stock prices is trading off if not earnings? COVID-19 charts? That doesn’t make sense.
The unemployment rate now is nearly 18%. There are 22 million lost jobs, and that was just in the last month. But that’s just a guess. It’s probably going to be many more than that.
The shutdown of the economy that we’re having now is causing a sharp selloff in GDP, which is followed by a decline in corporate profits … which is going to be abysmal in the quarter ahead.
So, during this stock market turmoil — the past three weeks or so — the market has done the exact opposite of what most people expect.
It has gone up! In fact, it recouped half its losses. How is that possible? All bad news … and the stock went up.
Well, what people don’t get is that the stock market is a leading indicator — not a lagging indicator. In past downturns, the stock market moves higher way before the economy bottoms and way before sentiment flattens out.
The best example I can give you is the Great Depression…
Comparing 2020 Market Turmoil to The Great Depression & 2008 Financial Crisis
In July of 1932, the Dow hit 40 and the economy continued to deteriorate further over the next eight to 10 months. It didn’t turn around until a few months later when FDR took office in March 1933. The Dow was already up 30% from its low.
The economy and the sentiment were still terrible, but the stock market always leads.
So, here’s my message to you: If you wait for the “all clear” sign to get back in the market or to buy again … you’re going to miss the big moves. In other words, if you wait for the robins, spring will be over.
That’s not my message. That’s a message from the greatest investor of all time, Warren Buffett.
And to put this in context for you, during the darkest days of the 2008 financial crisis, Buffett wrote an op-ed article in The New York Times titled, “Buy American. I Am Now.”
When he wrote this article, the stock market was already down 38% over one year. Just a few weeks earlier, Lehman Brothers went belly-up. It was the largest bankruptcy in history. The stock market cratered.
At that time — October of 2008 — he wrote that he was buying stocks. In fact, he said he was going to personally be putting his net worth — his personal net worth, not his Berkshire net worth — 100% into stocks.
Why? Simple … Be fearful when others are greedy, and greedy when others are fearful.
He wasn’t trying to predict where stocks would go over the short term. He had no idea. Instead, he was focused on the long term. Buffet wrote:
If you wait for the robins, spring will be over.
In other words, Buffer was saying “Don’t miss the boat.” Guess what happened after he wrote this? The stock market plunged even further.
After he wrote the op-ed piece on October 17, 2008, stocks continued to fall. In fact, they fell 27% further. They stopped going down on March 6, 2009, and most investors kept seeing bad news come out over the next several months as the economy got even worse.
And instead of going down, the stock market started to soar.
In fact, from the low of March 6, 2009 until just a month or two ago, the stock market soared more than 395% to a high in February, 2020.
Unfortunately, most investors sat on the sidelines when the biggest gains were happening. They were too scared to get back in the market.
You see, folks, they don’t ring a bell to let you know when it’s all safe. The secret is to focus on the long term, and to use the short term — the price volatility — to buy stocks when they’re cheap.
So, if you wait for COVID-19 to settle down, the economy to open up again, business to go on as usual and all the non-essential businesses to get back up again … I can almost bet you, dollars to donuts, you’re going to miss most of the market’s gain.
Don’t wait for the robins. Now is a great time to be invested.
3 ETFs for Long Term Gains
And now, what you’ve been reading for, the three ETFs that should do extremely well over the next few years.
I like these three because they have a huge, huge tailwind pushing them higher and because they sold off recently during this market downturn. They’re really trading at attractive prices and you should consider adding them to your diversified portfolio.
1 – Vanguard Information Technology Index Fund ETF Shares (NYSE: VGT).
Technology is going to continue to grow in importance in every facet of our business and personal lives. That’s just a fact. Just think of how technologically advanced we are from just a few years ago…
The top 10 stocks in this portfolio represent 60% of it. So, while the portfolio has a lot of stocks in it, just 10 represent the bulk of its movement.
Software and I.T. services make up the bulk of the fund. So, this fund has stocks like Microsoft, Apple, Visa, Intel, MasterCard, as technology continues to permeate every facet of our lives. This is a trend that’s not stopping. These stocks should do extremely well over the long term.
2 – Health Care Select Sector SPDR Fund (NYSE: XLV).
The health care industry makes up 18% of GDP, so you’re talking about close to $3.6 trillion dollars. That comes to about $11,000 for every man, woman and child in the United States. It’s only going to grow as the population gets older.
So, this is a secular way that’s just going to get bigger and bigger as time goes on. XLV is the oldest and largest fund in this segment.
The top 10 stocks represent half the portfolio, and they have stocks like Johnson & Johnson, UnitedHealthcare, Merck, Pfizer, Abbott Labs … It’s a really great selection.
3 – Global X Robotics & Artificial Intelligence ETF (Nasdaq: BOTZ).
Now, I’ve seen projections of A.I. — or artificial intelligence — adding close to $15 trillion to the world economy by 2030.
Tech is disrupting multiple industries. We see the impact daily in our lives.
Just think … iPhone facial recognition is powered by A.I. When you’re using Google Maps, A.I. is redirecting you to avoid traffic accidents and any other mishap in the road. That’s all A.I. — and that’s all driven by software and hardware.
One computer scientist said: “A.I. is the new electricity.” And I totally agree. [1]
The top 10 stocks in this portfolio represent 64% of it. So it’s pretty concentrated in that sense. And what I really like about it is that it’s globally diversified.
More than 40% of the companies in the portfolio are Japanese-based, 38% U.S.-based, 11% Switzerland-based and the balance is all throughout the world. And that’s great, because you want to be everywhere.
Great A.I. innovations and robotics are coming from all parts of the world. This portfolio has companies like and NVIDIA, Keyence, Intuitive Surgical, ABB … So, this is a really good ETF, especially now. It’s at a good price.
Your Investing Plan for The 2020 Stock Market Turmoil
If you wait for the robins, spring be over. Don’t wait for the “all clear” sign because it never comes. The future, by definition, is always going to be murky and uncertain.
Don’t say, “I’m going to wait until things settle down.” Now’s the time to get in.
In the short term, it’s impossible to predict what’s going to happen. But I just mentioned to you three trends that are about as predictable as the sun coming up tomorrow in the east over the long term.
Technology is going to continue to power ahead. Health care is going to continue to dominate our GDP as the population ages and grows. And A.I. robotics is already here and it’s in the early innings.
So, it’s much easier to play trends measured in years with good tailwinds rather than trying to pick what’s going to happen next week. The ETFs I’m recommending should do really well over the long term.
Now, if you like certain stocks, I definitely have a tremendous portfolio. I do a lot of research that you can get by just clicking in the description to my newsletter, Alpha Investor Report. Each month, I come up with one stock.
I recently came out with one that is really the does the financial plumbing of the brokerage industry. It’s a fantastic company.
This COVID-19 pandemic bear market gave us an opportunity to buy at a cheap price. And I think this stock is selling at a fraction of what it’s going to be worth in just a few years.
Bottom line, don’t wait for a bell to ring … because it never does. Now’s the time to get into the market.
Regards,
Editor, Alpha Investor Report
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