This article is a website version of our weekly FREE Best Ideas Newsletter sent on 31.10.2023. Sign up here to get it in your inbox every Tuesday.
This week I want to give you my best ideas on how to navigate the current market volatility to preserve and grow your capital. In that order.
If you're an experienced investor or just starting, these strategies can help you firstly manage and secondly profit from uncertainty.
Seven companies or you have lost money
Like me I am sure you have experienced turbulence in our portfolios recently. And if you didn't invest in the seven best-performing tech companies in the S&P 500, you probably find your portfolio showing a small loss. Mine is hovering around -3.5%.
So, you are not alone.
And coming to think of it would you have invested in those seven companies in the start of the year? I never even thought of it as I was thinking they were EXTREMELY overvalued.
Most markets below their 200-day moving average
Apart from the Japanese market, all markets currently find themselves below their 200-day moving averages.
So, now is not a good time to take on excessive risk. As we've discussed before, a lot of research have shown that highest volatility and biggest drawdowns tend to occur when markets are below their 200-day moving averages.
How you can make money now
You know there are enough negatives but dwelling on then and standing frozen in the headlights does not help us.
With this article I would like to encourage you to adopt a proactive mindset focused on preserving your capital, identifying opportunities to make money, and best positioning yourself for future market rebounds.
Five proactive ideas to implement now
Here are a few actionable strategies for you to implement:
Assess and Adjust Your Portfolio:
Seriously think of selling down positions that are causing you stress. To help with this, you might want to move your trailing stop losses to 15% from 20%. Also consider reviewing and acting on stop losses weekly instead of monthly for better risk management.
Sure, these positions may bounce back but if you are stressed out and emotionally tired of losses it may stop you from acting on great opportunities when they arrive.
Optimize Your Cash:
Make sure your cash is safe and earning the best possible returns. Remember the article I shared about how to stop banks from exploiting you? Make sure your cash is working for you, but also available when you want to start investing again.
Explore Bonds:
Bonds are looking interesting, particularly if you're in the USA. While I'm not suggesting you move your entire portfolio, consider allocating a portion to bonds, especially in areas where rates are attractive, for example bonds with a two-year maturity. It can provide stability and a source of income.
Build Your Buy List:
Now is a great time to start building a list of companies you've always considered too expensive. Monitor them closely for potential entry points as there have been some wild daily movements. The screener’s Alert function can be especially helpful to you here.
Practice Patience:
Finally, be patient. The current market environment offers an opportunity for careful planning and preparation. Rather than chasing after fleeting trends, focus on the attractive opportunities you've identified and wait for them to come to you.
Remember, the markets, like life itself, have their ups and downs. What matters most is how we respond. By taking a proactive and measured approach, you can better position yourself to profit while navigate through turbulent times.
If you'd like to discuss strategies or need assistance with implementing them, please feel free to ask – simply click on the Need Help? button at the bottom right of your screen.
Quant Value newsletter update
As you can imagine performance last week was mostly negative, but there were positive highlights, mainly due to good results, for example:
- Bel Fuse +22% on good results
- Höegh Autoliners +15%
- Nishimoto Co. +13% (Recommended this month)
Surprisingly companies in Asia, especially Japan continue to perform extremely well even increasing last week.
Subscribers are still sitting on the following solid gains:
- North America +6%
- Europe +6%
- Asia +23%
- Crash portfolio (2022) +26%
If these ideas sound interesting, you can get more information here: Your Treasure Map to Europe, Asia, and North America's Hidden Gems!
Shareholder Yield Letter update
Since May when we started the 23 ideas have already paid an average dividend of 1.3% and am sitting on an average return of 0.8% after the pull back in the markets last week.
As you can imagine top performers are the five oil and one coal company in Australian up 23%. BMW and eBay are the only ideas that are struggling. But as you can see the dividends keep in rolling in making it a great portfolio if you are looking for income ideas.
As things stand today the portfolio has an average historical dividend yield of 5.2% and bought back 5.6% of their stock last year. This gives you an average Shareholder Yield of 10.8%!
If this sounds like the kind of companies, you would like to invest in you can find more information here: Invest big, win bigger with our market beating large-cap strategy!
Your analyst setting you up for big gains
PS I know markets are still uncertain BUT have you already started building your buy list? If not, why not sign up today and start now.
PPS It is so easy to forget and put things off why don’t you sign up right now?
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