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Recently in this stock market crash I have been getting this question a lot, and I think it applies not just to this market crash, but to all large market corrections in general.

So, is it better to sell everything in your investment portfolio, or to hold on till the market recovers?

In this video, I share my thought process on how I make my investment decisions for my long-term investment portfolio, and I offer you two important pieces of advice which you can use to strategize your own investment portfolio.

In deciding whether to cash out, you need to determine if you are using an active or passive investing strategy.

If your portfolio strategy is passive investing like dollar-cost averaging, or annual rebalancing of an all-weather portfolio, then whether the market is up or down should not have an impact on your strategy, and there is no reason to change your portfolio strategy and panic sell just because there is a market crash.

If your investing strategy is more active, such as value investing, or asset rotation, and you are good at it, then by all means follow your strategy of rotating your assets into safe haven products like cash or bonds.

The problem that most people face is that they do not have a portfolio strategy in the first place. And if this is the case, then should you hold on to what you have, or sell it in case it goes lower?

In the past 50 years, the market has only corrected 30% or more about 5 times, and only 50% or more about twice. So we need to think about this in terms of a trade-off between upside vs. downside potential.

If the market has already corrected 30%, and you did not manage to liquidate your portfolio earlier, at this very point in time, how much lower can it go? Another 20-30% more?

But if you sell off and it recovers to the previous highs before you can buy back in, the gains you will miss out are 40-50%.

So you need to decide if the downside risks you are avoiding is worth the potential gains that you could miss out on.

Another major consideration is whether you are currently adding to your portfolio (cash inflow), or drawing out from your portfolio (cash outflow). This will determine how aggressive your portfolio strategy is, and I will talk more about it in the video.

Enjoy the video, and remember to “like” and “subscribe”!

Recently I have been receiving a lot of emails and messages asking about the market, and also an unprecedented number of people joining my private trading network, and the obvious reason for this is that the markets now are offering excellent trading opportunities.

Heading into Bear Market Territory

Last Thursday, we officially saw the stock market enter the bear territory, with a 20% correction from all-time highs.

Many people tell me that it is impossible to time the markets. But is that really true, or are they just parroting something they read online or from a book?

Take a look at the 2 charts below. The one on the left is the chart I posted for my students on 27 February 2002.

Now take a look at how accurately it played out on the right, which is the what actually happened.

Now imagine if you had that roadmap on the left, how much money would you have made, or how much money would you have saved by liquidating your portfolio before the full crash?

How Much Did You Make from This Crash?

While most “value investors” or “long-term investors” are complaining about how badly hit their portfolios are, the truth is that the only thing they can do now is quote Warren Buffett and hope that the market rebounds in the long-run.

Eventually, it probably will, and I will also be buying in once the crash is over, but why would I want to sit through a crash that can be avoided?

And more importantly, why would I want to miss such a great money-making opportunity?

These past few weeks of steep declines have probably been some of the best trading days I’ve seen in my career, allowing me to more than double my trading account (ROI of +169.54%) in this short span of time.

This is probably more than most people’s one year salary. Yikes!

 

 

 

And I am glad to be able to guide my students (including complete newbies) during this period of time to generate awesome returns as well on their trading accounts.

Swing Trading Opportunities

With the market in such turmoil (and high volatility), there are going to be a lot trading opportunities on the intraday and swing timeframe, but you will need to have the right skills and techniques to trade these markets.

I would also recommend using smaller lot sizes to trade if you are not used to fast markets.

For example, in my trade below, I used a very small 0.01 lot size to take quick trades on the S&P 500, which allowed me to make US$671 on just one trade in a few minutes.

 

If you take a couple of such trades a day, and use good money management to pyramid or stack positions on strong setups, it is not hard to generate 5 figures a day in such markets.

Of course, these are not normal market conditions, and I do not know how long they will last, which is why we need to make the most of it for the next few weeks.

Roadmap for the Bear Market

Some of the common questions I have been getting:

  • How long and how deep is this correction going to be?
  • When is the virus going to peak?
  • When should I start buying?
  • What should I be buying?
  • Should I sell off my portfolio in case it falls more?

In my opinion, a lot of factors are hard to predict, and this crash is unique because it happened so quickly.

The 2008 crash took 18 months to correct about 50-60%, while this time we took about 3 weeks to correct 25-30%.

That’s insanely fast. some people have not even had the chance to panic sell yet. 😆

Although China has mostly managed to control the spread, and is on the route to recovery, many countries in Europe, Middle East and the US are still seeing and exponential increase in cases, so what we want to see is a deceleration of cases, so that from there we can estimate where the peak is.

If you look at the graph of all the past corrections in the S&P 500, there are only about 5 times in the past 55 years where it has gotten worse then this. (Also don’t forget to join our free Telegram channel for daily market updates if you click on that link.)

Personally, I do not think the bottom is here yet, and after consulting my charts over the weekend, I have come up with another roadmap for the next few months.

To be fair, I will only be sharing this new roadmap with my students, and I will continue to monitor the markets daily so that I can update them when I feel that it is time to start buying.

The Once-A-Decade Opportunity

Anyway, if you have missed the move down, do not despair, because the next big opportunity is the move up, once the decline ends.

Opportunities like this to multiply your wealth only comes once in a decade, so if you don’t want to miss this chance, I would like to invite you to join our private network with an awesome community of traders.

If you would like to avoid missing out on any of such awesome trades (which we deliver on a daily basis), then you should definitely check out our training program & trading signals bundle:
https://synapsetrading.com/the-synapse-program/

See you on the inside! 💰😎🔥

Last week, we had an epic week, with stock indices swinging up and down on alternate days, giving swing traders one of the best opportunities to trade.

Yields plunged (which meant bonds spiked), Gold was up, and oil was also bearish.

In this post, I will be giving an update on 2 of my largest positions:

  • Short position on Crude Oil
  • Short position on S&P 500

 

Short position on Crude Oil

For those of you following my last blog post or my Telegram channel, you will know that I have been stacking my short positions in oil for quite a while, and recently with the price war OPEC, Russia and the US are having, prices are on a downward spiral.

Just today, prices plunged 25-30% in one day!

I have taken the chance to cover my positions, and recently initiated a long position at $30, as I feel that it is a bit oversold, and prices are very near the lows back in 2003 and 2016, so maybe negotiations might start again to push prices back up.

 

Short position on S&P 500

For those who have been following closely, you will also know that I have been short on the stock market, using the S&P 500 as a benchmark.

At the first sign of decline, I posted this predictive roadmap, which has turned out be be uncannily accurate.

 

Simply by following this, my students and I have managed to stay one step ahead in the market, and we have been profiting handsomely both from long and short positions.

As I mentioned in my last trading video, you need a solid trading plan if you want to be able to make money from the markets, instead of chasing price movements blindly.

 


This is where we are the moment in the roadmap, and I am still holding my short positions.

Is this a good time to start buying?

In the long run, I am still bullish on stocks, so I will keep looking for good buying opportunities.

The challenge, however, is avoiding large drawdowns.

So I will want to wait for the dust to settle before buying, and not attempt to catch a falling knife.

If you look at the chart below, since the 1970s, there have only been 3 times when the market corrected to 50% or more, so such super crashes are actually pretty rare.

So maybe a 20-25% correction this time might be more likely, I will see when we get there, since I am still short at the moment.

 

 

Overall, the last 2 months have been pretty fantastic, with 39.81% portfolio gains in February, and 25.8% returns so far in March.

These gains large larger than normal, due to market conditions, but it would allow me to chill for the rest of the year. 😄

Remember, it’s not how many shots you make, but how many shot actually hit the target. One good shot is all is needed to make the kill.

 

Going forward, this week the market is looking bearish now, and the level of fear is increasing. This will present us with excellent trading opportunities.

If you would like to avoid missing out on any of such awesome trades (which we deliver on a daily basis), then you should definitely check out our training program & trading signals bundle:
https://synapsetrading.com/the-synapse-program/

See you on the inside!

With many momentum-based trading algorithms in the market nowadays, corrections tend to be sharp and vicious, leaving many traders and investors shell-shocked and unprofitable.

As a market participant, what is your strategy when approaching such a market? What is the best way for you to take advantage of this opportunity?

Enjoy the video, and remember to “like” and “subscribe”!

In a bull market, everyone is a genius because it does not take any skill to get great returns.

However, the real test of your portfolio is during a market crash or crisis. How will it fare if the stock market drops 50%?

If your portfolio is anti-fragile, it will actually benefit from such market volatility, and give you opportunities to buy assets on discount.

Enjoy the video, and remember to “like” and “subscribe”!