In anticipation of the severe correction, how to best prepare for it?

[ultramartian]

Dear Sol, this is related to the latest Market Update of March 11, 2021. You mentioned a severe correction is coming and that every Tactical Investor should get prepared to buy the dip. I have no doubt about this multiple wave correction will happen. My only problem is my portfolio/fund size is very small, and I am currently only sitting on 30% cash. When the correction happens this fund will not be enough to make significant impact on the "One can then stop doing what they don’t like and start doing what they love" statement for me.

So my question (and also many other fellow tactical investors regardless of their portfolio size) is, should I adjust my portfolio to reserve more cash for the crash? If so, when? And to what percentage? I know you can't give personal financial advice, I am just trying to get a general idea of how I can best prepare myself for such rare correction of a lifetime.

The other question is: if there are multiple waves of dip and rally, should a tactical investor wait until the bottom is solidify before deploying his/her limited funds, rather than deploying funds every time the market pulls back?

Of course no one has a crystal ball. I know ultimately I am responsible for my own decision. But just would like to listen to your take (and other wise men's) on this issue.

[AstuteShift]

You can wait for the big one instead of the mini dips

The mini dips I just get in the green plays

Also, eliminate that feeling of fear and also greed. It takes a while to build capital and also to preserve it

Patience and discipline is the two most important things

This bull market will likely last for a long while since it’s a hybrid baby bull. So forget about instant riches and thinking like the redditors since 90 percent of them will lose their money

For example look at lotto winners, they lose almost if not all their money since they emotionally could not fathom or handle it

[SOL]

Dear Sol, this is related to the latest Market Update of March 11, 2021. You mentioned a severe correction is coming and that every Tactical Investor should get prepared to buy the dip. I have no doubt about this multiple wave correction will happen. My only problem is my portfolio/fund size is very small, and I am currently only sitting on 30% cash. When the correction happens this fund will not be enough to make significant impact on the "One can then stop doing what they don’t like and start doing what they love" statement for me.

Don’t underestimate the power of compounding. This bull is expected to last many years. There are Tactical Investors that locked in gains of over 200% last year, some as much as 320. Btw the reason they locked in such gains, is because they understood the principles of mass psychology well and fear was never allowed to enter into the equation. Lastly, they were not aiming to lock in 200% plus gains, they just did because Fear was replaced with focus. Don’t underestimate what you are capable of doing. It is amazing what the human mind can achieve if it’s only given a chance, the problem is that most people falsely assume they can’t reach for the stars but gladly and almost willingly play in the dirt

So my question (and also many other fellow tactical investors regardless of their portfolio size) is, should I adjust my portfolio to reserve more cash for the crash? If so, when? And to what percentage? I know you can't give personal financial advice, I am just trying to get a general idea of how I can best prepare myself for such rare correction of a lifetime.

The danger of waiting for a crash is that you lose a lot of firepower in the process and the market could run up and then pull back to the current level. In other words, from the perspective of the one waiting for a crash there was no crash as the market pulled back to the level it was trading at when this individual suspected a big crash was in the works. One sign that a stronger correction is in the works would be for all our indicators on the monthly charts to trade to the extremely overbought ranges and for bullish sentiment to be trading above the 54 ranges for at least a few weeks in a row.

The other question is: if there are multiple waves of dip and rally, should a tactical investor wait until the bottom is solidify before deploying his/her limited funds, rather than deploying funds every time the market pulls back?

I wish we were that good that we would tell our subscribers exactly when the markets would bottom or top but sadly, we are not. Trying to time the exact top or bottom is like trying to catch a falling dagger, a process fraught with pain and misery.

Of course no one has a crystal ball. I know ultimately I am responsible for my own decision. But just would like to listen to your take (and other wise men's) on this issue.

Over the years I have found out that fear pays poorly, so you remove fear and replace it with curiosity or anticipation. Individuals fear things only because they don’t understand them. So from an investment perspective, a market crash is a buying opportunity but 90% or more cannot see that, so they fear what they can’t understand. Once you understand that crashes represent opportunity a whole new world opens up to you. The brain thrives when it’s not operating under fear. We will do our level best to warn our subscribers when we start to see warning signals that a big correction may be in the works. However, remember we did not label this “the market of disorder” for fun.

[stefk]

Of course no one has a crystal ball. I know ultimately I am responsible for my own decision. But just would like to listen to your take (and other wise men's) on this issue.

We are responsibel and free to make what we find best for us. Sol gives us a direction and a path to follow. The information in the market update is gold. It gives you the knowledge and the general direction to follow, and knowledge is power.

°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°°

In the companies proposed in MU, there are real nuggets. I remember in the years 2004, 2005. He had recommanded BOOM, I think it was in the two dollars or more. I made my first 100% with it, it made boom in my wallet, I was so happy. But look at the chart, if I had waited some years. Nobody could know it in advance. You get the weapons, and you make what you want, but at the end you are always winner....

https://bigcharts.marketwatch.com/advch ... se&state=9

[gnosis12]

In the companies proposed in MU, there are real nuggets. I remember in the years 2004, 2005. He had recommanded BOOM, I think it was in the two dollars or more. I made my first 100% with it, it made boom in my wallet, I was so happy. But look at the chart, if I had waited some years. Nobody could know it in advance. You get the weapons, and you make what you want, but at the end you are always winner....

https://bigcharts.marketwatch.com/advch ... se&state=9

It seems like you have been with this service for a long time.

May I ask a few questions

How long have you been a subscriber with Tactical Investor and how has your account performed over the years?

If I had to ask you to describe Sol what would you say in a few words about his style of investing, character, etc?

I hear Sol often mentioning from time to time, that the service has changed over the years? would you agree with this assessment?

Any other information you could provide would be great

I am very happy to have run into Sol, I am just trying to get some extra information about the service and it seems like you were someone that joined over 10 years ago.

[bpcw]

Some good answers but not sure ultramartian's question regarding cash levels was answered. So for example, if I'm 100% invested in the markets and there is a big correction, I cannot take advantage of this, if I'm 50% invested I can, by buying more at lower levels. So the question I think being asked, is what percentage of cash should I hold.

My answer would probably be to gauge cash levels to where we are in the overall market cycle, so for example, the Dow has been on a stellar ride, so assuming you had invested a lot during the last correction, you should have been gradually taking profits so that now you have a good proportion of cash ready to deploy during a correction. In addition, we also have to consider where individual stocks are, if oversold, in general they won't correct as much in a general stock market correction, so you take profits from shares that have done well and overbought and recycle into oversold stocks. You could do this recycling now with 30% of your funds, leaving 70% in cash or 50/50, depending on your risk level.

I do not consider myself an expert here at all so would be interested in Sol and other's opinions. And yes I know none of us should consider ourselves experts!

[AstuteShift]

You can keep like 30-40 percent of it in cash or 50 percent

Half of my portfolio is in options or LEAPS, the rest in ETFs or leverage ETFs. That way your portfolio still grows and you have cash just in case of big corrections so you can buy your lovely stocks

Also divide each play into thirds, keeps you from being emotional and super invested in one play

[stefk]

In the companies proposed in MU, there are real nuggets. I remember in the years 2004, 2005. He had recommanded BOOM, I think it was in the two dollars or more. I made my first 100% with it, it made boom in my wallet, I was so happy. But look at the chart, if I had waited some years. Nobody could know it in advance. You get the weapons, and you make what you want, but at the end you are always winner....

https://bigcharts.marketwatch.com/advch ... se&state=9

It seems like you have been with this service for a long time.

May I ask a few questions

How long have you been a subscriber with Tactical Investor and how has your account performed over the years?

If I had to ask you to describe Sol what would you say in a few words about his style of investing, character, etc?

I hear Sol often mentioning from time to time, that the service has changed over the years? would you agree with this assessment?


Any other information you could provide would be great

I am very happy to have run into Sol, I am just trying to get some extra information about the service and it seems like you were someone that joined over 10 years ago.

1) I received my first MU in 2004 or 2005. My account performed very well. The best operation I made was with the physical palladium. I purchased with the family spare money, palladium bars for 25K euros at 200$ per oz. With time, I really forgot it, I lost interest in commodities, like Sol, he says he is not a gold bug. In 2018, I saw on a dutch forum there was a short squeeze with palladium. Good surprise, palladium was at 1800$ per oz.!!!!!!

2) his style of investing: he is not a money chaser, he is a trend chaser. I would say he has a great observation power. His character: I think he is a bon vivant. But he can also be a stoician.

3) I remember, he was more focused on technical analysis, but mass psychology was already very important. But of course, the markets of 15 years ago are not the same as nowadays. The trends are not the same, so yes the service and the syle have changed.

To resume, to make money with tactical investor, keep cool, no stress no panic, dont chase money, but follow the trend, Sol is champ to identify the trends. Voilà, I hope it helps you.

[ultramartian]

Some good answers but not sure ultramartian's question regarding cash levels was answered. So for example, if I'm 100% invested in the markets and there is a big correction, I cannot take advantage of this, if I'm 50% invested I can, by buying more at lower levels. So the question I think being asked, is what percentage of cash should I hold.

My answer would probably be to gauge cash levels to where we are in the overall market cycle, so for example, the Dow has been on a stellar ride, so assuming you had invested a lot during the last correction, you should have been gradually taking profits so that now you have a good proportion of cash ready to deploy during a correction. In addition, we also have to consider where individual stocks are, if oversold, in general they won't correct as much in a general stock market correction, so you take profits from shares that have done well and overbought and recycle into oversold stocks. You could do this recycling now with 30% of your funds, leaving 70% in cash or 50/50, depending on your risk level.

I do not consider myself an expert here at all so would be interested in Sol and other's opinions. And yes I know none of us should consider ourselves experts!

Exactly the opinion I am looking for. Thanks!

[ultramartian]

You can keep like 30-40 percent of it in cash or 50 percent

Half of my portfolio is in options or LEAPS, the rest in ETFs or leverage ETFs. That way your portfolio still grows and you have cash just in case of big corrections so you can buy your lovely stocks

Also divide each play into thirds, keeps you from being emotional and super invested in one play

Do you keep 50% of your portfolio in cash and 50% in options/LEAPS/ETFs? How about stock?

[SOL]

You can keep like 30-40 percent of it in cash or 50 percent

Half of my portfolio is in options or LEAPS, the rest in ETFs or leverage ETFs. That way your portfolio still grows and you have cash just in case of big corrections so you can buy your lovely stocks

Also divide each play into thirds, keeps you from being emotional and super invested in one play

Do you keep 50% of your portfolio in cash and 50% in options/LEAPS/ETFs? How about stock?

Astute is an advanced option player. Technically one could put over 50% of one's money into options (LEAPS) if one knew what one was doing. But most don't fully understand the positive and especially the destructive aspects of options to take this path. Each person has their own investing style, so I would be careful about trying to imitate another. You can mix and match until you find your sweet spot. There is no rush, there is always ( regardless of what you think at this moment) another opportunity in the making.

We always divide our funds into three lots for it teaches, discipline, it teaches you to be patient and to wait for a stock to trade to certain levels before getting in. And if you only get one or two lots in, the third lot can be deployed into another play.

Investing, comes down to your state of mind, when you are calm you are in control and you automatically start to sense how much risk you should take. When you are gripped with panic, no amount of good counsel can help. So if you follow the general Tactical Investing methodology you will always have some cash at hand because we take profits when a stock hits a certain point, we only deploy one lot at a time and we never chase a stock or any investment. We let the market come to us.

[SOL]

1) I received my first MU in 2004 or 2005. My account performed very well. The best operation I made was with the physical palladium. I purchased with the family spare money, palladium bars for 25K euros at 200$ per oz. With time, I really forgot it, I lost interest in commodities, like Sol, he says he is not a gold bug. In 2018, I saw on a dutch forum there was a short squeeze with palladium. Good surprise, palladium was at 1800$ per oz.!!!!!!

Now I know why your wife was so HAPPY with you. You really brought home the bacon. That was one helluva of a trade .

[AstuteShift]

1) I received my first MU in 2004 or 2005. My account performed very well. The best operation I made was with the physical palladium. I purchased with the family spare money, palladium bars for 25K euros at 200$ per oz. With time, I really forgot it, I lost interest in commodities, like Sol, he says he is not a gold bug. In 2018, I saw on a dutch forum there was a short squeeze with palladium. Good surprise, palladium was at 1800$ per oz.!!!!!!

Now I know why your wife was so HAPPY with you. You really brought home the bacon. That was one helluva of a trade .

Man, that gets me pumped! Love seeing big success like this

[AstuteShift]

You can keep like 30-40 percent of it in cash or 50 percent

Half of my portfolio is in options or LEAPS, the rest in ETFs or leverage ETFs. That way your portfolio still grows and you have cash just in case of big corrections so you can buy your lovely stocks

Also divide each play into thirds, keeps you from being emotional and super invested in one play

Do you keep 50% of your portfolio in cash and 50% in options/LEAPS/ETFs? How about stock?

Something like that. I do not recommend options if you’re new since it really tests your emotions and being to the max. Patience and discipline must be heavily used with military precision when dealing with them

I do stocks on the plays with no options however I keep the discipline to not over invest in any particular play. The only exception is when the market crashes, that’s when I go all in on either leverage ETFs or the good old QQQ (Nasdaq 100).

[Triplethought]

I do stocks on the plays with no options however I keep the discipline to not over invest in any particular play. The only exception is when the market crashes, that’s when I go all in on either leverage ETFs or the good old QQQ (Nasdaq 100).

I also bought QQQ on the latest dip, although I'm still small... using 1 or 2 of SOL sized lots at a time. I recently doubled my lot size so I could deploy more cash since I've only been 40% invested this year.

Question for you guys: This weekend the WSJ had an article saying that this year the trend has shifted from tech/growth to Value stocks. They pointed out some financeg and energy stocks that are up 30% this year versus Nasdaq plays which have languished in the last few weeks meaning for the year 2021 they aren't up as much.

While it is true that a few of our financial stocks are doing well I'm wondering what you think of deploying extra cash into the QQQ versus say DIA. In short do you believe the general premise that "value stocks" will grow more than tech stocks this year?