3 Powerful Strategies to Survive This Market Downturn

This post 3 Powerful Strategies to Survive This Market Downturn appeared first on Daily Reckoning.

Stocks are cracking this week.

The major averages can barely put together a one-day relief rally. Commodities are flailing, led by oil’s 4% rout that dragged crude closer to $30 than it’s been in 12 years. Everywhere investors turn the market’s crumbling under their feet.

But not you. You’ve been watching the charts like a hawk. You’ve seen the telltale signs of weakness leading up to this dumpster fire. You’ve even trimmed your trading portfolio so thin it looks like a heroin-addicted runway model on a juice cleanse…

So you’re just sitting on your keister waiting for a tradeable bounce, right?

No? You’re itching to place some trades?

Hold the phone, my friend. Think it over…

I know traders want to trade. We want to grind out a win like a veteran golfer on a hot Sunday afternoon—even if the market says to chill out in the shade for a while. Protecting capital is hard—and boring!

So today I’m going to help cool your jet as we patiently wait for the right trade to come along. Here are three incredibly useful things you can do to keep your trading engine humming along while stocks lurch lower…

1. Play the lottery

The Powerball jackpot has jumped to an eye-popping $1.5 billion—and the next drawing is tonight!

What are you waiting for? Instead of dropping several thousand dollars on a bad trade, you can put your spare cash to work for you by investing in lucky numbers. Heck, even important “experts” on TV agree with this plan…

Sound advice…

Will you win? You tell me. Your odds are approximately one in 292 million. Yeah, and buying multiple tickets won’t materially improve your odds either. Good luck—and be sure to drop me a few bucks if you hit it big.

2. Sell your junk

How many years has it been since you cleaned out the attic? I’m sure you have all kinds of garbage important collectibles that need sorting. Why not sell a few for a tidy profit while you’re at it?

I’m not talking about a giant yard sale. Instead, now may finally be the time you learned how to use eBay!

By the time you sort through that box of 8-tracks and “vintage” leisure suits, this market correction will be kaput.

Plus, your house will be clean. And you’ll be ready to put that fresh capital to work once stocks decide to find solid ground.

3. Prep for a rally

All joking aside, the market isn’t going down forever.

So while most investors are swearing off stocks forever and counting their losses, you should be preparing for the next rally.


Start making lists. There are two lists in particular I like to “curate” during a market drawdown. The first consists of quality stocks I’d like to own over the long run that are getting the snot kicked out of them. I can check in with these stocks once a week for signs they’re bottoming. If they give me a clear signal, I can load up on shares.

The second list consists of the surprising outperformers I might want to trade in the near future for short-term gains. These are the stocks that were especially strong during the recent correction—and they’re not difficult to find. Right now there are less than 20 S&P 500 components that are within 3% of their respective 52-week highs.

If you’re ready to pounce on new trades whenever the market decides to come back to life, you’ll be more prepared than 99% of investors who’ll be chewing their fingers to the bone during every leg lower.

Get cracking…


Greg Guenthner
for The Daily Reckoning

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The post 3 Powerful Strategies to Survive This Market Downturn appeared first on Daily Reckoning.