The Keys To Making Profits In Any Market (Including This One)

The past couple of weeks have sent investors into a frenzy. 

I know most aren’t surprised by this market hiccup, but volatility like what we’ve seen recently can still be tough to stomach.

It’s times like these that it becomes important to get back to the basics. In fact, I’d venture to say that anyone can follow just four simple steps to invest successfully. They’re not difficult concepts, and they’re most important when the market is in flux.

1. Have a system. 
There are too many securities in the world to approach the market without some framework for making rational choices. For instance, my newsletter, Game-Changing Stocks, has a simple system — put 80% of the portfolio into predictable stocks or index-tracking vehicles and allocate the remaining 20% to aggressive growth securities with greater potential returns than the overall market offers. This system is backstopped by millions of data points that offer a reliable statistical underpinning for predictable results over the long term. 

Over the long term, corrections are going to happen. That’s reality. But we go in knowing that, and we do not panic when the arrows on Wall Street start to turn red or the market crashes. It has happened before, it will happen again. We don’t have to like it, but it’s no big thing.

2. Be vigilant in your hyper-rationality. 
Yes, I predicted this downswing. But, really, was that so hard? The Chinese market was soaring. Ours at home was treading water at best. Plus Wall Street has been openly talking about the “Chinese problem” for months. 

Having participated in the international business arena, I know what every single person in business knows: You simply cannot, under any circumstances, ever, period, amen, trust a single word from China. Assume every financial document is faked. Assume every statement is suspect, if not an outright lie. There is no due diligence. There is no transparency. 

So with a soaring market and a less-than-trustworthy business culture, it wasn’t exactly a stretch to make the call I did. You would have done the same thing in my shoes. My guess is that, like me, you have bought a used car in your life. Well, the degree of skepticism that you know you needed for that transaction is the exact same degree of trust with which you should approach investing in China. 

Be hyper rational. Do not board bandwagons. Think for yourself. 

Remember: The seven most dangerous words an investor can embrace are “This time it’s going to be different.” 

No, it’s not. 

The market is a pattern and the human brain is exceptionally well-built for pattern recognition. That’s all I did, and you can do it too. 

3. Don’t be too quick to call a bottom. 
The other day I was talking to a buddy of mine who worked for years on Wall Street. This guy held a membership on the Exchange. He was one of the people who brought Duracell and Allstate to the market in their landmark IPOs. The guy knows what he’s talking about. 

And do you know what this guy did? We were sitting in a burger joint in Denver and he mapped out a trade for me. Not just what to buy, but how to buy it. I learned more on that cocktail napkin than I ever did in school. But it gets better. He even told me exactly what the trigger signal was to launch the trade. 

It was crude oil breaking $40. 

Well, when that happened, I emailed him. 

“I think you’ll be OK,” he shrugged, “But now I think I’m going to wait for $35.” 

But what about all that careful mapping and the thoughtful hedging? 

“Andy,” he told me, “things change. You can spell profit with only five letters: A-d-a-p-t.”

My point? Let the dust settle so you can reconnoiter a position, and then make a rational decision. 

Let me be clear about what that is going to look like: It doesn’t involve calling the top or bottom of the market. It involves a tried-and-true long-term buy-and-hold approach. If you want to identify a sell price in advance, that’s smart. That’s prudent. But that is what we do with individual securities, not the overall market. Trying to time the market is a fool’s errand. 

4. Always, always, always keep some powder dry. 
My Game-Changing Stocks system requires the allocation of 20% of your portfolio to aggressive growth stocks. But at no point, ever, should all of that cash be in the market. There should always be a little dry powder around for when opportunities present themselves. 

And make no mistake, when the market tumbles like we’ve seen recently, this is a huge opportunity. A lot of Wall Street’s biggest names have already taken big haircuts. That’s a recipe for an easy gain. Again, not for the market overall, but for individual securities. 

P.S. Using these four keys, I’ve identified one of the biggest opportunities for investors to make incredible gains that I’ve ever seen. It all has to do with Apple. But I’m not simply interested in shares of the tech giant. I’ve identified five Apple suppliers with tons of potential gains. One stock has gained more than 300% since 2013, while another has more than tripled since 2014.

But I believe this is just the beginning. Apple is seemingly unstoppable, and these firms are poised to benefit as long as Apple continues to thrive. To find out which companies hold the most promise, simply follow this link.