In a recent Wealth Watch update, I told you the big stock market rally since late December was running out of gas and another correction was coming for stocks.
I also explained to you why this is great news if you’re a patient investor with a longer-term outlook.
That’s because history clearly tells me that after the kind of double-barreled buy signals we saw in December and then again early this month, stocks typically gain 20%-plus over the rest of the year.
But it’s not always up in a straight line. That would be too easy.
The Markets Today: We Are Right Here
Here’s where we are right now: From the December low to the high last Friday, the Dow Jones industrial average surged 14.6% higher in just five weeks!
To put that into context, in any random year the Dow is up about 8–10% on average. So the recent gain goes down in my book as a very good YEAR, much less just one month.
Stocks became just as overbought last week as they were oversold in December. And what typically happens next? A stock market correction of 4% on average happens about 80% of the time…
Monday’s 200-point Dow dive was most likely the start.
So what now?
That’s the good news. Pullbacks like this come and go quickly. In just a matter of weeks it could all be over. Then stocks will climb to new highs by year-end. And it should be a doozy of a rally!
But Mike, How Do I Capitalize on This Action?
Glad you asked…
Here are your next steps to cash in as this scenario plays out:
Step #1: Don’t be fooled again by the doom-and-gloomers in the financial media. You can bet they’ll be out in force telling you the January joyride for stocks was just a bear market rally, but don’t believe it.
Just when it seems like most investors are eager to “fold ’em,” that’s when you’ve got to “hold ’em.” Or better yet, go all in, which brings me to our next step.
Step #2: This pullback is handing you an excellent opportunity to position yourself in high-quality dividend stocks at bargain prices.
Then, once you have your stake claimed, all you have to do is sit back and wait patiently for the share prices to recover.
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch
Editor’s note: ENCLOSED: Your 3-Step Retirement Plan
For folks over the age of 50, it’s a must-read… And we enclosed your 3-step retirement plan right here, to read for free.
Hurry, though, we’re pulling this offline TONIGHT! Click here now.