The Biggest Downside to Buy and Hold

Here in Florida we’re starting to hear public service reminders to be prepared for the upcoming hurricane season. The trouble is, most people aren’t listening. Why? Because Floridians haven’t seen a major hurricane since Charley in 2004.

Not having seen a major hurricane in 13 years, Floridians have gotten complacent. It’s human nature … and it applies just as equally to stock market corrections as it does to hurricanes.

Are you ready for the next market hurricane? Is your portfolio battened down?

The now 8-year old bull market has been a gift that keeps on giving for the buy and hold crowd (and TradeStops subscribers that have let their winners run!). Yet as with all good things, this historic run will end.

The steps you take to protect your portfolio today, could mean the difference between a comfortable life or one with some hard choices and sleepless nights.

One good question to ask yourself is how long you can go before your portfolio fully recovers after a market correction.

Take a look at recent recovery periods from market corrections since 1999.

In the market crash from 2000-2002, it took 7 years for the market to return to breakeven. In the bear market downturn of 2007-2009 that knocked 55% off the market’s value, it took more than 5 years to break even.

Even the most recent downturn in 2015-2016 took more than a year to break even.

These bear markets impacted millions of people. Their retirements were changed or even postponed. Many people got out of the market on the way down because they were afraid. And they still haven’t gotten back in.

Are those acceptable outcomes to you? I hope not. Let’s consider some alternatives.

The most basic alternative is to use the TradeStops Stock State Indicator (SSI) on the S&P 500. That’s our simple green / yellow / red light system that is available in TradeStops Plus, Premium and Lifetime.

What sort of difference could using the SSI on the S&P 500 have made? A huge difference, even a life-changing difference. Take a look.

Using the SSI system on the S&P 500 you could have saved yourself nearly three years of grief in total across all three corrections. Moreover, you wouldn’t have taken nearly 50% losses on the way down.

Not only would you have broken even sooner, you would have started reinvesting at a much higher level than by using buy and hold. That translates into gains of almost 100% greater than by using a buy and hold strategy.

TradeStops is positioned to help you survive any upcoming bear market. Of course, TradeStops will also keep you in this bull market for as long as this bull market remains the gift that keeps on giving.

Just make sure that you’ve got your own market hurricane preparedness plan so that you can recover more quickly than most.