How Not to Kill Your Retirement (Market Situation Report’s Transcription)


I hope you enjoy this Market Situation Report. The video format is here.

                                    How Not to Kill Your Retirement

People are killing their retirement, and it has nothing to do with Obama, Bernanke, the FED, or any other external entity.

Most of what happens in our life, is created from our beliefs.

It is our beliefs (how we act and what we do) that create our reality.

For many people, what I just stated is going to sound weird, untrue, and it will probably get people to unsubscribe; and I understand.

Earthlings gravitate to thoughts and ideas that are already aligned with theirs. (Even if those thoughts and ideas are making them poorer.)

It is how our brains are hardwired.  We are pulled towards people and ideas that are like-minded.  We Earthlings have a huge bias that hurts our portfolios.

I think some of you already know this.

If you step back and look at the data, I’m not sure how one could come to any other conclusion than: it is our own behaviors that are creating the most pain and destruction on our portfolios and wealth.

Here’s the data:  there are hundreds of thousands of people that have grown their investments over the past five, ten and fifteen years.  These people are not the evildoers working on the top floor of banks, insurance companies and hedge funds.

These are hard working, family-focused people…maybe just like you.

But what these people have done is very different from the millions or hundreds of millions that have not gotten more secure and safer (and richer) over the past five, ten and fifteen years.

So how did they do it?

I’ve written out the formula below.

Beliefs determine thoughts – which determine actions.

Those who have grown their investments, act and behave differently than those who haven’t.

Let me show you what I mean with a real world example.  The chart below is of Walgreens (WAG).

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This price chart goes back to the end of 2008.  You can see the pretty pink trend line going up on a diagonal.  At the very end of May of 2012, to the disapproval of many, I added Walgreens to the Obvious Trend Portfolio.

Most people saw that big 30% fall from mid-2011 to the end of 2011.

In fact, if you were to zoom in on this price chart and just look at the last twelve months, you would think this company was going out of business.  A 30% fall in 12 months. Yikes.

I am showing you this price chart of Walgreens because the Obvious Trend Strategy alerted me that Walgreens could be a possible addition to the portfolio.

Here is one very important key difference between people who grow their wealth and those who do not.  People who grow their wealth follow a proven system; a system that can be written out and easily described to people.

It is a system that is not based on emotion, news, or stories, but one that is based on data and scientifically proven facts.

The system is not about them, you, or me.  It’s not about whims or gut feelings. It’s not about news or headlines either – just numbers.

There is a proven system behind the “why” Walgreens was added to the Obvious Trend Strategy. 

Here are some main ingredients in the Obvious Trend Strategy:
1) 
Find up-trending investment, which is not difficult.
2)  Wait for one of those up-trending investments to have a correction in the range of 15%
to 40%, while still staying in its up-trend; which is still not that difficult.
3)  Wait for the price to start to move up after the fall.  (Buy a stock that is down 30%, 40%,
50% – VERY DIFFICULT).
4)  Place a reasonable, small fixed stop-loss on it until the price moves up 25% from where
you purchased it.  (This is somewhat difficult if you have to do it on your own.)

The good news is, I show my subscribers how to do this AND I do it for them, too.  Walgreens is a great example of why this approach works so well.

The Obvious Trend Strategy waited for that 30% correction.  It noticed that the stock was still in an up-trend.  It placed a reasonable 15% fixed stop-loss, and then stopped paying attention.

Did I mention that ingredient?

A key behavior difference is that people who grow their investments well, stop looking at them once the strategy that purchased the investment for them starts paying attention to it.

Look at the price chart below.  The pink circle shows where the Obvious Trend Strategy saw more upside than downside, and alerted us to it.

Notice how the stock dropped 11% immediately.  Then, it moved up, gapped up, fell back down, and moved up again.

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From that very bottom price on the chart above, Walgreens fell 41%!!!

But, we didn’t take a 41% hit; we were taken for an 11% ride to the downside. BUT, we were already prepared to lose 15%.

So, “How not to kill your retirement?”

Have a plan AND truly understand that your Earthling brain is going to work against you when you need it most.

You (your emotions and feelings) are what hurt your wealth the most; not Bernanke or anyone else.

Think about relying on a proven plan AND being honest with yourself. Then, and only then, can external forces stop playing a large role in your future.

If you did not have a plan, and you purchased Walgreens’ stock right when the Obvious Trend Strategy did, would you have taken the additional 11% drop?

My twenty plus years of investing tells me that everyone who didn’t have a plan going into Walgreens, bailed out of the stock when it fell that additional 11%.

Now, look at Walgreens today.  From the day the Obvious Trend Strategy purchased it, (May 11, 2012) until today, subscribers are up 40% (including dividends).

During the exact same time period, the Stock Market was up 16%.

That means Walgreens is up 2.5 times better than the Stock Market.

This is how you don’t kill your retirement, or your future, or your portfolio.

It is not about Walgreens.  It’s also not about stock picks.  It is about the procedure you follow, the strategy you follow, or the system that you follow.

AND, be honest.
——————-
Investors think they behave like this guy below.

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Humans think they can be logical and unemotional; but they can’t.  There is no more emotional animal on planet Earth, than the human.

The honest fact is, humans behave like this guy below when their money is in the market.

Investors need to come to terms with who they really are, when they have money in the market.  Humans are not logical when their wealth is on the line.

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Humans are emotional beings.  Emotions and investments have a long history of not getting along.

So, how do you NOT kill your retirement?

Get a plan that relies very little on you.
Get a plan that can adapt to external events, so that being right is not as important. 
Get a plan that works for Earthlings.
Get a plan that has been seriously back-tested.

And, most importantly, get a plan that others are using so that you do not have to do it on your own.

If your entire investment peer group was hit badly by the 2000 and 2008 stock market crashes, then perhaps it’s time to upgrade your peer group; because not everyone was hurt then.

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This is how you do not kill your retirement.

So, what else can you do to not kill your retirement?  You can join us on April 9th.  This is my first Semi-Annual Strategy Gathering of 2013.  I only host two in-person meetings each year.

Of course, I will stream this live over the Internet.  We will look at all the markets, l will conduct live Q&A, review the strategies, and make any changes to them.

What is RC Peck paying attention to?

Get the same research I provide to my Money Management and Private Elite Clients.  In the past few weeks, subscribers have received an alert to a stock that has fallen 70% over the past five years.  This stock pays almost a 7% dividend yield and, since bottoming, it is already up 17.5%. But you have not missed out on this move yet; there is more upside.  It is just starting to move.

The best part, is that this stock is part of a sector that is only seven percentage points from hitting lifetime highs. That means that this stock has a lot of catching up to do.

Of course, we will talk about Gold, Real Estate and any other investments you have on your mind, during the always-loved “Speed Investing” round.

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I’m looking forward to seeing everyone either in-person or online for our upcoming April Semi-Annual Strategy Gathering.

Together, we are growing and protecting your wealth,

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Editor’s note: My team and I have spent the last decade, and nearly $1 million, designing an overall system to take the human error out of investing… and help you beat the market over the long-term.  It’s simply called The Fearless Wealth System.  Large hedge funds spend millions of dollars for these kinds of results. Click here to learn more about how regular investors are using it to profit right now.

 

 

 

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