So, at the end of the day…no one knows what exactly the future holds. SO how does one profit from unknowns? Do they just get lucky? Nope. They have a system. They buy/hold/average down when they know a stock is undervalued (not knowing exactly when the market will revalue it) and they sell when they know risks are high, when the stock is overvalued. And it’s the same concept with indexes too.
What I love about having a measurable system is that, while NO system will call tops or bottoms, we can enter in periods of low valuations and exit at higher valuations and ensure we don’t enter at high valuations.
Now, in this coming sell-off, it will temporarily weigh many of our positions down during it, but they stand the shot of running like race horses after it, unlike stocks that were overvalued in it. Plus, since we’re invested, we earn very high yields while we wait it out. Earning 3-8% in an almost no-yield world, is a great thing. Meanwhile, there will likely be an asset or two that could go up during the bear market. Last week’s weekly video tells it best though.