One of the most common questions I get asked by investors is, "Should I set stop losses to limit my losses?"

My answer? " Why not set capture gains to score wins instead?"

In your nest egg, if you’re properly diversified, protected and capturing gains through your annual rebalancing, then you might even earn gains in a downturn (as Nilo Bolden did). That is going to be harder to do in the next pullback because bonds are vulnerable. So, you have to know what’s safe in a world where both stocks and bonds lost money last year. If you have a stop loss strategy that first locks in your losses and then automatically transfers your equities to fixed income or a money market fund, you could lose there as well. With the amount of risky leverage going on, you really have to know what you own. 

In your individual trading, if you’ve done your research upfront and have made an investment that you are confident was purchased at a bargain, then if the price drops, the right answer is to buy more lower. This takes wisdom and training. If you rely on what you feel like doing when a price goes down, then you’ll be simply selling low.  

A Capture Gains Strategy for Your Nest Egg
A time-proven nest egg strategy requires annual rebalancing to be successful. In your nest egg, you should rebalance once a year. (Click to learn more in my Rebalancing Blog.) This is a Buy Low, Sell High system on auto-pilot. When the price goes down, you buy more lower. When gains are piling up, it’s time to trim the fat slice back to where it should be, i.e. selling high. Keeping enough safe, and knowing what’s safe in a world where stocks and bonds are in a bubble, is a better strategy than selling low.   

In your trading, you always need an exit strategy, but that exit strategy shouldn’t be based on locking in losses. You should be confident that there is a window of opportunity for you to earn gains before clicking the Buy button. The Stock Report Card and 4 Questions for picking a leader can help you to make better choices in your trading portfolio. (I teach these strategies on Day 2 of my Investor Educational Retreats.) If you are just going on a hot tip or an article that’s like trying to guess what a 100-piece puzzle is while turning over only one tile.

When you have a Capture Gains mindset, volatility means that you might be able to trade around the core – buying low and selling high again and again and again. The Wall Street rollercoaster becomes your joy ride.

Performance of the S&P500
July 2017-July, 2019

When volatility is the name of the game (like it is in today's market), it is very important to use winning tools, strategies and mindsets. Stop losses is a sabotage mindset that will have you losing over and over again in today’s world where market and company volatility are commonplace. (Meanwhile, the brokerage earns gains on the trading fees.)

So, think like a "winner" instead of a stop loser. No one likes to think of themselves as a loser, but if you are worried about losses instead of committed to capturing gains, then you have a losing mindset, even if you don't admit it. The first thing most of us need to change to be more successful in investing is our mindset. Of course, you need a skill set and a tool kit to match that.

So, how do you activate Score Gains Thinking?
Below are six tips that start you on the path.
(You still need to learn the pie charts, annual rebalancing and smart strategies for successful trading. Call 310-430-2397 or email info @ NataliePace.com for additional resources.)

1. Pick a Winning Team
2. Employ a Winning Game Plan
3. Be a Patient Buyer
4. Capture Your Gains Early and Often
5. Limit Orders: The Key to Profitability in Volatile Markets.
6. Use Special Teams Strategically

And here are the details...

1. Pick a Winning Team.
A big component of a winning team is making sure that you have the right athletes on the field. You don't want your kicker playing linebacker, or your quarterback on defense. Go to your accountant for tax tips (not investment tips). Most brokers are salesmen, so you must be the boss of your money, rather than letting someone else make all of your decisions. Never invest based solely upon an article you read, without doing full and complete analysis. Grade your guru with a results test before taking any investment advice from her.
​
2. Employ a Winning Game Plan
A great nest egg strategy includes the following: 1. Keeping a percentage equal to your age safe. 2. Overweighting safe in volatile times. 3. Knowing what is safe. 4. Diversifying your "at risk" assets by size and style. 5. Adding in hot industries. 6. Avoiding the bailouts. 7. Rebalancing at least once a year -- preferably using limit orders. To learn more about this formula, read The ABCs of Money.

3. Be a Patient Buyer
Never buy high in the 11th year of the bull market.

4. Capture Your Gains Early and Often
Adopt a strategy of taking your profits early and often in your Stocks on Steroids trading portfolio, as we are in the late stage of the business cycle. Rebalance your nest egg at least once a year.

5. Limit Orders: The Key to Profitability in Volatile Markets.
One of the best ways to ensure that you are buying low and selling high is to employ limit orders. Once you own something, determine your exit strategy and let the limit order do the work for you. This is more reliable than keeping your ear to the ground.
​
6. Use Special Teams Strategically.
Just as older football players are more prone to injury, New Chips are Safer than Blue Chips. Small caps tend to move more quickly than large caps. Understanding the difference can improve your investing results tremendously. If this terminology is confusing, then that’s a clue that it’s time to invest in learning.
 
Now is the time to fix the roof while the sun is shining (while the markets are at an all-time high). 

If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by July 31, 2019 to receive the best price. 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 or email info@NataliePace.com for pricing and information. ​​​​​
​

Other Blogs of Interest
Buy and Hold Works. Right?
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​Dear Natalie,
 
The Dow Jones Industrial Average return was 7.0% since January 2000 with dividends reinvested, or 197% total return. So, Buy and Hold did work. It was just gut-wrenching. Is there something that I’m missing here? I had a hard time with the markets for too many years which ultimately affected my current financial position. And although I understand "the markets" and the whole financial system way better now, I remain ....
 
Gun Shy
 
Dear Smart to Be Gun Shy,
 
You can still ride a horse from LA to NYC. However, that doesn't mean that it "works."
 
It's not just gut-wrenching when you lose more than half of your assets. It can wipe you out, prevent you from retiring, throw your credit score in the toilet, make you borrow at higher interest rates and affect your health. When someone loses more than half of their assets and retirement, this is not a math problem. It’s a life problem. I have seen far too many foreclosures, short sales, bankruptcies, deaths and even suicides to believe that you should buy into this very misleading statistic.
 
When you lose 55% of your retirement (as the Dow Jones Industrial Average did during the Great Recession), it doesn’t recover at the same rate as the market. When you lose more than half, you are now earning gains on that much lower amount. 

Between 2009 and 2018, the S&P500 rose to 2,506.35, from 903.25 (with a low of 676.53 on March 9, 2009). That equals a gain of 277% total, or 27.7% annualized over the 10-year period. This is just the gain of the market, not including dividends. However, the gain of your nest egg over that same 10-year period, including dividends, is still only 54.4%. That equals a gain of 5.44% annualized. Most of that decade would have been hell, and you’d be lucky to still own your own home.
 
So, the annualized gain of the market does not come close to reflecting the real world. “Lies, damned lies and statistics,” Mark Twain.
 
It took the NASDAQ Composite Index 15 years to crawl back to even. The Dow did fare better in that recession. However, as is human nature, there were a lot of people buying into the “New Economy” who were overweighted in Dot Com stocks. They watched in horror as the index lost 78% of its value between 2000 and 2000. Most Americans (and Canadians) have only slightly more money in retirement today using Buy & Hold than they did in 2000. Most of the increases would be contributions.

On the other hand. If you were using my pie chart system, your losses could have been limited to 25% or less. On Dec. 24, 2007, I warned investors that the coming downturn was going to be nasty, and suggested overweighting 20% safe. So, the average 50 year-old would have had 30% at risk and would have lost about 17%.

Again, many people were so horrified at the losses in 2009 that they sold low and went to cash at the bottom. No one who used my pie chart system was tempted to make that colossal mistake. In fact, our office received quite a large number of messages of gratitude. Click to watch Nilo Bolden's testimonial.  
 
What lies, damned lies and statistics are people buying into today? Actually, a lot of people are twice burned and wise. The real reason that the Dow Jones Industrial Average is trading so high is due to corporate buybacks. Companies can borrow money very cheaply, repurchase their own stock and make their earnings per share look stronger than it really is. It’s like bait in the water that the unsuspecting are supposed to snatch up. However, most of us live in the real world and we can see very clearly that no one in our circle of friends is better off financially today than they were twenty years ago.
 
One other problem with Buy & Hold is that the closer you get to retirement, the less you are able to wait out a decade of hell. In theory, that is easily solved by keeping enough safe in bonds. However, there are many problems with that idea in today’s world. I’ve included just a few below.
 
The Difficulty of Getting Safe in an Over-Leveraged World

1. Most people don’t have enough safe. (I’ve been doing a lot of 2nd opinions, so I’m keenly aware of this.)
2. Bonds lost money last year.
3. Over 50% of investment grade corporate bonds are just one rung above junk bond status.
4. Many bond funds have up to 20% of junk bonds in them.
5. Annuities are not FDIC-insured. They are only backed by the insurance company who sold it to you.
6. Insurance companies are vulnerable to market downturns. They are even more exposed to the high levels of risk in the bond markets than banks are.
7. Money market funds have redemption gates and liquidity fees. You’re going to be charged to have access to your money, if you can get it at all, if the bank or financial firm underwriting the MM fund gets into financial trouble.

 
The Bottom Line
Buy and Hold worked just fine between 1970 and 2000. However, since 2000, we've had two recessions that look more like Great Depressions. The world is over-leveraged, drowning in debt, and using low interest rates to create asset bubbles. Buy and Hold does not work in a stagflation economy. Modern Portfolio Theory with Annual Rebalancing works great, provided you know what's safe in a world where stocks, bonds and real estate are all in bubbles. 

Getting your financial plan from a salesman is as bad an idea as…

• Letting the realtor decide which home you can afford to buy
• Letting the bank or debt collector craft your budget around debt payments
• Letting the car salesman sell you the biggest car on the lot

 
Wisdom is the cure. It’s time to learn and master the ABCs of Money that we all should have received in high school. 

If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by July 31, 2019 to receive the best price. 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 or email info@NataliePace.com for pricing and information. ​​​​​
​

Other Blogs of Interest
​Wall Street Secrets Your Broker Isn't Telling You. 
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​In the late stage of the business cycle, you’ll start hearing a lot of jargon that doesn’t quite add up to the rosy headlines. For instance, on June 25, 2019, Federal Reserve chairman Jerome Powell said, “Proximity to the ELB [effective lower bound] poses new problems to central banks and calls for new ideas. The questions we are confronting about monetary policymaking and communication, particularly those relating to the ELB, are difficult ones that have grown in urgency over the past two decades.” Powell closed his speech with what might have been considered a fairly benign statement in normal times, saying, “We are also mindful that monetary policy should not overreact to any individual data point or short-term swing in sentiment.” Wall Street responded by selling off 200 points on the Dow Jones Industrial Average.
 
What in the world was Powell saying? Who understands this language, and why weren’t they happy with his speech? It certainly is different from what you hear from the White House, which is basically, the U.S. is on a tear, doing great and you’re insane if you don’t buy stocks and real estate.
 
If you think there’s something going on behind the scenes, you’re absolutely right. If you are formulating your financial plan based upon the headlines, then you’re on a buy high, sell low rollercoaster. There are time-proven solutions that work much better. Let’s start with a few Wall Street secrets that your broker isn’t sharing with you.
 
13 Wall Street Secrets and Sayings

1. Never confuse a bull market with wisdom.
 
2. Never reach for yield.

3. The higher the dividend, the higher the risk.
 
4. Bulls make money. Bears make money. Pigs get slaughtered.
 
5. A rising tide lifts all ships.

6. Late stage of the business cycle.

7. Financial imbalances.

8. Overleveraged.

9. Investment grade.

10. Effective lower bound interest-rate.

11. Accommodative policy.
 
12. Modern Portfolio Theory.

13. What's Safe? (It's not what your broker is selling you.)
 
And here’s what they mean.
 
1. Never confuse a bull market with wisdom. There are times when even a monkey throwing darts at a wall full of stocks could make a killing, i.e. a bull market. The share prices go up because stocks are in a bull market, and everything is rallying. There are also times when even experienced investors go belly-up, i.e. a bear market. A sound nest egg strategy is designed to protect your assets from downturns, capitalize on rallies and is never over-leveraged on a bad idea. Buy and Hold is not a strategy that works in today’s world. (If you think it is, keep reading.)
 
2. Never reach for yield. When you are getting paid nothing in your savings, it’s very tempting to get sold into high-risk bonds, money market funds and CDs that are not FDIC-insured. The salesman will convince you that you are going to earn a solid XYZ yield and that income will set you up! What s/he doesn’t say is just how risky the company you are investing really is. Highly leveraged companies still have access to bank capital at 5% (sometimes even lower). So, if they are borrowing from you at higher than that, it tells you everything you need to know. They are borrowing from you because they can’t borrow from a bank. Oftentimes, these risky, junk bonds or junk dividend-paying stocks pay the highest commission to the salesman that is advising you. As Roy Rogers was fond of saying, “I’m more concerned with the return of my money than the return on my money.”

3. The higher the dividend the higher the risk. GE isn’t the only highly-leveraged company that is borrowing from bond investors to pay dividends to stock investors, i.e. borrowing from Peter to pay Paul. Investors were livid when they discovered that GE was buying back its own stock and paying high dividends to keep its share price inflated and make earnings look stronger than they really were (so that it could continue to borrow). When a company cuts its dividend, as GE did, the share price drops like a knife. GE’s share price dropped to half on the news, and is currently trading at less than 1/3 of its price just two years ago. If you wait for the headlines that a company is in trouble, it’s too late to protect yourself. (Warren Buffett managed to sell all of his GE stocks a couple of months before the dividend cut.)
 
A 5% dividend isn’t enough to pay for losing half of your principal. If you don’t know how to evaluate the debt load of the company, without having blind faith in your broker-salesman’s assurances, then you should underweight dividend-paying stocks in 2019. More than half of the investment grade companies are at the lowest rung – just one downgrade away from junk bond status.
 
4. Bulls make money. Bears make money. Pigs get slaughtered. Although this aphorism is obvious, the employment of its wisdom does elude a lot of people. When the safe money is earning zero, and you’re reaching for 5% or higher return on your stocks or bonds, you’re falling into the porcine category. If you’re all in on stocks right now because the markets are at an all-time high and Wall Street is in party mode, you’re more likely to end up in the pig sty than the castle. A well-designed, time-proven plan doesn’t just earn money in good times. It also protects your assets from the downturns.
 
5. A rising tide lifts all ships. This secret is right in alignment with “Don’t confuse a bull market with wisdom.” Bull markets lift all stocks. However, as Warren Buffett says, when the tide goes out, you’ll see who has been swimming naked. Bear markets can sink the share price of even robust companies with hot new products. Apple lost half of its share price value in the Great Recession, even though the smart phone was a market disrupter that would later take the company on to a trillion-dollar valuation. 

​6. Late stage of the business cycle. The economy is cyclical. There are good times and there are tough times. Economists call this the business cycle. So, if you’re translating what the late stage of the business cycle means, you might say that the economy is on recession watch. Things are closer to a correction than they are to continued growth and share price gains. In fact, the second quarter of 2019 is ushering in an earnings recession, where many S&P500 companies are expecting lower earnings for the first time in years. Part of this is due to the one-year bump everyone received from the tax cut in 2018. However, another piece is that the economy is slowing. In 2018, GDP growth was 2.9%. In 2019, it’s predicted to fall to 2.1%.

7. Financial Imbalances. Normal folk would call this “bubbles.” Warren Buffett has admitted to having $100 billion on the sidelines, due to the overpricing of stocks and bonds. Alan Greenspan has said that stocks and bonds are in a bubble. Robert Shiller (Nobel Prize winning economist) warns that the last two times when stocks were this overpriced was before the Dot Com Recession and the Great Depression. Real estate is unaffordable in 74% of U.S. communities. Bubbles.
 
Low interest rates create bubbles. This is something we’ve seen for the past two decades. In the Dot Com Recession the bubble was in Internet stocks. In the Great Recession, the bubble was real estate. Today, it’s stocks, bonds and real estate, which puts the economy on much more perilous footing than it was on in 2000 or 2008. (See chart below.) One of the biggest problems is that there just isn’t enough room to cut interest rates to really goose economic growth. However, the banks have a new Bank Bail-In program, using your money… Something that I’ll address in an upcoming blog.
 

​8. Overleveraged. The total private nonfinancial credit is currently over $30.9 trillion. $15.6 trillion of that is consumer debt, of which $1.6 trillion is student loans. $15.2 trillion is concentrated in the business sector. This is much higher than it was before the Great Recession. As the Federal Reserve Board indicated in their most recent Financial Stability Report, “Although debt-financing costs are low, the elevated level of debt could leave the business sector vulnerable to a downturn in economic activity or a tightening in financial conditions.”
 
At the same time, the Feds are aware that if they cut rates, then corporations may be tempted to continue to borrow, putting their firms at even greater risk. Business debt is “historically high” and risky debt has increased. Firms with low credit scores and/or very high debt are still borrowing. The leverage has increased above the levels of 2007 (before the Great Recession).
 
 
9. Investment grade. Any corporate bond rated AAA, AA, A or BBB is considered investment grade, with anything lower entering into “speculative” or junk bond status. The problem is that you might own a bond or a bond fund that you believe is investment grade, which is more speculative than you might realize. ½ of all investment grade bonds are BBB (one hairs breadth above junk status). Additionally, many investment grade bond funds can actually invest 20% (or more) in junk bonds. So, it’s time to review the bonds and bond funds in your nest egg.

10. Effective lower bound interest-rate. The problem with the ELB being at zero is that there isn’t any room for a rate cut to help an economy that has entered a recession. If you take a look at the Bubble Chart above, you’ll see that the Feds had plenty of room to cut rates in the Dot Com Recession. In fact, bonds were earning up to 25% in 2001, as a result of rate cuts! There was ample room in the Great Recession, though the Feds also had to rely upon quantitative easing to get the economy rolling again. This time around, the Feds are still highly leveraged and rates are only at 2.25-2.5%. This could make for policy impotence, and is one of the reasons why the Feds are not going to be hasty about a rate cut. This also means that bonds won’t help your nest egg in the next recession – unless a miracle happens and the Feds are able to increase rates before the next downturn. That means you have to learn what’s safe in a world where both stocks and bonds are in a bubble and vulnerable to the next recession.

11. Accommodative Policy. This is the longest expansion in history. However, the Feds have had to keep rates near zero in order to achieve it. An “accommodative policy” that makes money free to borrow (for corporations, not for consumers) creates bubbles. As the economy heats up and moves on its own, the Feds typically raise interest rates to stop the speculation. That didn’t happen in this expansion. However, under Jerome Powell, the language and messaging has indicated that the Federal Reserve is very concerned about keeping the free punch bowl (cheap, easy money) available to Wall Street.
 
Wall Street is expecting a rate cut at the Fed meeting July 30-31, 2019. Since the July 26, 2019 GDP report is likely to be quite weak (potentially as low as 1.3%), and the earnings recession will have been recorded by many S&P500 companies, there’s a chance that the Feds might cut rates. However, that isn’t a given, as I indicated in my analysis of the board governor’s speeches over the last few weeks. If the Feds do cut rates, the Street will know it is because the economy is weak – meaning that will not necessarily translate into a stock rally.  
 
12. Modern Portfolio Theory. MPT is a simple idea. Keep enough safe and diversify the rest. Any good broker-salesman will tell their client that they use MPT, even if the plan they design is nothing of the kind. In fact, I’ve been doing a lot of second opinions of managed portfolios lately, and I have yet to find one person who was properly diversified, with enough safe.
 
MPT with annual rebalancing earned gains in the last two recessions and outperformed the bull market in between. Buy & Hope lost 78% in the NASDAQ during the Dot Com Recession and 55% in the Dow Jones Industrial Average in the Great Recession.
 
You can’t afford to lose more than half of your assets every 8-10 years. So, you must be the boss of your money and learn the basics of investing (they are easy), in order to be sure that you are protected from the next downturn.
 

Other Blogs of Interest
Unaffordability: The Unspoken Housing Crisis in America. 
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Housing is Unaffordable in 74% of the U.S.
 
On Thursday, AttomData.com released a report outlining the stark reality of today – that the average wage earner cannot afford to buy a home in 74% of U.S. housing markets. The most unaffordable markets are in California (8 of the Top 10), with Maui, HI and Kings County, NY (Brooklyn) rounding out the Top 10. Cook County, IL (Chicago) and Maricopa County, AZ (Phoenix) were also near the top of the list. Meanwhile, if you want to live in Houston, Detroit, Cleveland or Columbus, you’re likely to find something that you can afford. Essentially, if you live in a place that’s teaming with jobs and cutting-edge technology, you might have to live in your car.
 

What’s almost as astonishing and heartbreaking as unaffordability, given that real estate prices are at an all-time high, is that there are still 5.2 million U.S. properties that are seriously underwater. This number is up from last year, even while real estate prices have continued to increase. How is that even possible? Well, the banks have taken to giving loan mods where a ton of interest and penalties are tacked on. They then give the homeowner a payment they can afford and a low, often fixed, interest rate, with a total amount due (not including the interest earned over the decades) that is above the price of the home. For some reason, the homeowner thinks this is a good idea, even though they now owe 25% or more than the home is worth.   
 
If you are one of the unlucky ones who owe more than the value of your home, it’s time to look into a few options that are not going to be offered by your bank. If you are locked into a low-interest rate loan that is far above the value of your home, particularly if you are struggling to make the payments, it’s time to get a new plan. Even if the loan mod puts payment within reach, it is likely a terrible idea to accept the deal of paying more for your home than it is worth, when markets are at an all-time high. If real estate values drop, then you’ll be even more locked in and more seriously underwater, with few options on how to sell, move or escape. (Call our office at 310-430-2397 for resources.)
 
Will Housing Unaffordability Tear Down the Economy?
The crystal ball on the economy, provided by the Federal Reserve Board, forecasts that GDP growth will slide down to 2.1% growth in 2019, from the 3.1% growth we enjoyed in the 1st quarter. We should start seeing that slowdown in the 2nd quarter 2019 GDP. The advance report will be released on July 26, 2019 at 8:30 am ET by the Bureau of Economic Analysis (BEA.gov). 

High real estate prices affect everything. It makes it harder for mom-and-pop shops to stay in business, weighs down a retail sector that is already struggling to catch up to Amazon (and from financial predators who take advantage of their need to access debt) and gobbles up most of the budget of the Middle class.
 
If you want to buy a home in Marin County, you’d need to hand over more than you earn (on average). Of course, this is impossible and you’d never qualify for a mortgage, which is why the PHSI is down 3.1% year over year in the West and the MidWest, where home prices tend to be more affordable, has become the market leader. 

The high cost of housing has contributed to consumer debt soaring to an all-time high – above where it was before the Great Recession. Household debt is now $13.67 trillion. Public debt is $22 trillion. As Alan Greenspan warned in an interview in April of this year, “The CBO is putting out huge forecasts of the deficit and nobody seems to mind. They will mind when it gets monetized.”
 
How Unaffordability is Already Impacting the Economy

• Real Estate Sales are Down. Year over year contract signings are down 0.7%, marking the 17th straight month of annual decreases in sales (source: The National Association of Realtors). 

​

• The Retail Apocalypse Continues. 10 major retail stores have filed for Chapter 11 this year already, including Payless Shoe Stores, Gymboree and Z Gallerie. 2018’s list included Sears, Claire’s and Brookstone, with Toys R Us going under in 2017. Sadly, stores like Sears and Toys R Us, died a slow, painful death by debt (not by Amazon). The financiers who owned the companies were bleeding the businesses dry, using capital to pay off loans, rather than investing in the stores, in products and in hiring and retaining great employees. (If you visited a Sears or Toys R Us in the last few years, you experienced this firsthand.)  

• U.S. Tourism Market Share is Down. Researchers like to pin the blame on the current President. However, soaring real estate prices mean that businesses have to charge more to stay afloat. The cost of lodging, restaurants and a bar tab have gone a bit mad over the last few years, which may account for why tourists from China, South Korea and Japan, traditionally our strongest markets for tourists, are down since 2015.
  
  
• Debt is astronomical. In addition to high public and consumer debt, many corporations are highly over-leveraged. Half of the investment-grade bonds are at the lowest level, where leverage is increasing and EBITDA may be overstated. According to the Financial Stability Report, “There has been a recent rise in “EBITDA add backs,” which add back nonrecurring expenses and future cost savings to historical earnings and could inflate the projected capacity of the borrowers to repay their loans…” In other words, bonds are not as safe as you’ve been led to believe… (It’s time for a second opinion on your current retirement plan.)

 
What Does This Mean For Home Owners, Sellers and Would Be Buyers?
 
Should You Buy?
Should You Sell?
Should You Hold?
 
See my check-list below for a blueprint by which to analyze your options.
 
A Boomer couple, who are close to retirement, just purchased an 800 square foot fixer-upper in South Central Los Angeles for $450,000. There are a million ways that this can go wrong for them, and only a couple of ways that it can go right (mainly if they are able to fix and flip before the next downturn starts to snowball)…
 
 
12-Point Check List for Homeowners, Home Buyers and Renters
 
1. The Mortgage Interest Deduction.
2. Buy What You Can Afford.
3. Have a 10-Year Or Longer Vision.
4. Lock-in a Fixed.
5. If You’re Underwater on Your Mortgage, Get a Second Opinion.
6. Align Your Mortgage Pay-Off Date With Your Retirement Date.
7. Hard Assets Will Hold Their Value Better Than Paper Assets in the Coming Years.
8. Safe, Income-Producing Hard Assets That You Purchase for a Good Price.
9. Interested in Buying a Home Abroad? Read my blog.
10. Consider the Shadow Inventory.
11. Never Buy High.
12. Keep the Money in the Family.


And here is additional information on each point.
 
1. The Mortgage Interest Deduction is one of the best ways to lower your tax bill and stop making Uncle Sam rich. You can write-off the cost of financing your home, or a second home, up to a cap of $1,000,000, and your HELOC up to $100,000. If you are getting killed in taxes, this is a great solution. However, it is never a good idea to buy high. By itself, this is not a good reason to purchase today.

2. Buy What You Can Afford. The Thrive Budget works like a charm when you limit your basic needs to 50% of your gross income. When you overspend on your home and become property rich and cash poor, you risk losing your home and ruining your credit score, and ensure sleepless nights and stress. If your city is unaffordable, there are creative solutions to your problem that are worth considering. Call our office for a private coaching session to discover some ideas that might work out great for you. Buying more than you can afford or at the top of the business cycle can easily create a decade’s long nightmare for you.

3. Have a 10-Year Or Longer Vision. In 2019, when real estate prices are back to an all-time high, it is not the time to buy and flip. If prices weaken, you could be locked into your home for a much longer period than you anticipate. So, be sure to cast your vision out over a 10-year horizon, or longer, and know what you’ll do with your home if you receive a great career opportunity in another city, or if real estate values plunge, or if your family expands beyond the capacity of your current living space. 

4. Lock-in a Fixed. Interest rates are still at a historic low. Locking in a fixed rate now could save you tens of thousands (or more) in the coming months and years (assuming you haven’t already done this). Don’t fret that the banks aren’t loaning. See what the mortgage lending specialists are offering, and if it’s competitive, consider it. Don’t do this, however, if it means a big increase to your debt to assets ratio, or if it means your mortgage will be underwater.

5. If You’re Still Underwater, Get an Unbiased Second Opinion. Not from your bank. If your mortgage is still severely underwater, as it is for over 5.2 million Americans, then it’s time to seek the counsel of a professional who is not in the banking industry. Paying a million dollars for a home that is only worth $700,000 or less makes the bank rich. In the meantime, your credit score remains in the toilet due to your debt being so much higher than your assets. There might be solutions that you haven’t thought of. In this scenario, it is also exceedingly important to keep squirreling money away in your tax protected retirement accounts and health savings account. Being a slave to the mortgage, at the expense of your own retirement and future, is making the banksters rich at your own expense.  

6. Align Your Mortgage Pay-Off Date With Your Retirement Date. One of the best things you can do to plan for retirement is to align your mortgage pay-off date with your retirement date. Once you retire, life will be much easier if you’ve reduced your expenses dramatically. Since housing is one of the biggest expenses in the budget, having no mortgage will help tremendously. If you haven’t done this by the time you retire, but you have a lot of equity, your current home might be a great way to earn income by renting it out while you downsize to a more affordable home. Do the math and make sure that the income is well above all of your expenses, and makes it worth the trouble.

7. Hard Assets Will Hold Their Value Better Than Paper Assets in the Coming Years. Stocks and bonds are in a bubble, and are highly leveraged at this time. Even though real estate can also lose value in a downturn, you can still live in your home or rent it out. When a company restructures their debt, the stock becomes toilet paper and your bonds could lose all or most of their value. Being a property owner could be the best way to retain wealth in the challenging years ahead.

8. Safe, Income-Producing Hard Assets That You Purchase for a Good Price. With stocks and bonds in a bubble, one of the best areas of “safety” is to consider safe, income-producing hard assets that you purchase for a good price. Every word in that sentence matters, which takes real estate off the table, for now, in most cities. There are other options that are not well-publicized, however, that are a great price, and offer 25% or more Return On Investment. Curious? Attend my next Investor Educational Retreat! Call 310-430-2397 to learn more.

9. Interested in Buying a Home Abroad? Read my blog that includes a 10-Point Ex-Pat Check List.

10. Consider the Shadow Inventory. With 5.2 million homes underwater, that means there are lot of distressed homeowners, many of who are late on their payments. There are also homes being sold at auction, and others that are bank-owned. If you shop in the shadow inventory, you might achieve savings of 1/3 or more off of the multiple-listing service.

11. Never Buy High. Buying high in real estate creates far more problems than just being locked into your home and loan for an extended period of time. Be sure to buy only what you can afford and to find a home that is not overpriced. In most American cities, that will mean waiting patiently until prices down, or getting creative about how you might transform an undervalued asset into income-producing housing.

12. Keep the Money in the Family. Keep this mantra forefront as much as possible. Whenever you and your family benefit, rather than a stranger landlord, the money can remain part of the family estate. This is something to think about in housing throughout the arc of life, from college to retirement and to what to do with aging parents.
 
Owning your own home has many advantages. However, buying real estate high can be a nightmare that drains you dry for years. Over 10 million homes went to auction in the wake of the Great Recession. That stress is soul-killing and difficult to endure. It prevents you from investing in other opportunities that will make your life easier and ruins your credit-score – even if you keep making payments.
 
So, being an astute buyer, instead of being sold into something now by a clever broker-salesman, is key to success in home-buying and investing in income-producing property.
 



​If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by July 31, 2019 to receive the best price. 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 or email info@NataliePace.com for pricing and information. ​​​​​
 

​

Other Blogs of Interest
Are You Being Pressured to Buy a Home or Stocks?
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​Dear Natalie:
 
It seems that Trump and the Federal Reserve are looking at a reduction in interest rates, which I believe will extend the bull market in both the stock market and real estate. I'm guessing they're going to try to keep it going until after the US elections in fall of 2020, to keep the illusion of a strong economy going, as this is such a cornerstone of Trump's platform. 
 
We have moved into a cash position, and are being pressured by financial advisors to take advantage of the year and a half of growth to invest the money for higher returns. We are feeling foolish for being cautious, like maybe we should work with this change. At the same time, it feels like a house of cards and there are so many variables that could knock it down, despite the interest rate issue. How significant is the interest rate benchmark, and are we unnecessarily losing out on growth with them backing off from increasing it? Are we wise or foolish to remain on the sidelines, patiently waiting for things to play out (especially given a short time line to retirement, thus having a short time to grow it)? It is hard to be confident in our choices when things are all so uncertain!

Signed, Under Pressure!
 
Dear Step Out of the Show Room:


First off, you are quoting a sales pitch as if it were truth, when the truth is that you’re quoting a sales pitch. The Feds and the White House are not colluding to win an election. In fact, if you’ve been paying close attention, then you’ll recall how absolutely apoplectic #45 is that the Feds aren’t playing his game. The Administration has even looked for ways to replace Federal Reserve Chairman Jerome Powell. The truth lies in the Asset Bubble chart below.
 

The Federal Reserve Board governors know that they kept interest rates too low for too long. Low interest rates create bubbles. Now, if the economy weakens, as it is forecast to do this year, the Feds don’t have enough room to lower interest rates sufficiently to help boost economic growth. So, there is a majority on the Federal Reserve Board who are interested in keeping rates as high as they can for as long as they can. That’s why this week has been so weak on Wall Street – because Jerome Powell in his speech on June 25, 2019 said that “Monetary policy should not overreact to any individual data point or short-term swing in sentiment.”

​As to the other idea that you are missing out on gains, that is why we use a pie chart rather than market timing. You’re never all in or all out of the market. You’re always in at an appropriate level based upon your age. You should also be diversified and have exposure to some hot industries. In a normal world, your safe side would be invested in bonds, and that side would earn a decent return. We’re not in a normal world. We’re in an over-leveraged world. The Bubble Chart above shows you that in black and white. 

​I’m not sure why you have so much cash on the sidelines, however, I’d be more concerned about buying into losses than missing out on gains. As you can see from the charts below, most people lost more than half of their investments in the last two recessions. This was with bonds making money. Bonds lost money in 2018, and due to the amount of high-leverage and low interest rates are too vulnerable to be worth the risk, when you are getting such a low return.

4.5% yield is $4500 on $100,000. If you’d invested in General Electric to get that kind of dividend, you would have lost more than half of your principal. General Electric is not the only company borrowing from Peter to pay Paul. In fact, according to Howard Silverblatt, the senior index analyst at S&P Dow Jones Indices, one out of four S&P500 companies are buying back their own stock to make their earnings look higher and their share price look lower (i.e. financial engineering). Financial engineering is not real growth. Investors were livid when they learned that GE was doing this, but are unaware that it is absolutely rampant on Wall Street these days.
 
Things are always uncertain. The one thing that is certain is that when the markets are at an all-time high, the broker-salesmen get desperate and the sales pitches get more urgent. Your own desires try to push you to believe them because you want to join the party.
 
At the depths of a recession, the broker-salesmen are all jumping ship, and at a loss of what to tell you now that they’ve lost more than half of your assets. The turnover of financial advisors in Great Recessions can be 90%! Your stomach acid is keeping you awake at night. By the time things look the worst, it is usually the time when the economy starts to turn back on track. However, you’re tempted to sell low because you’re not reading data, you’re still reading headlines and looking at a sea of red on your brokerage statements. In other words, listening to salesmen and stomach acid is a losing proposition that tempts you to buy high and sell low. Time-proven systems are always a great plan, and work the best by avoiding losses in recessions and outperforming the bull markets in between. The pie chart system, along with annual rebalancing, pulls the red and green lights out of the planning and encourages you to do what you are supposed to do without the emotional attachment.
 
So, the real question is: why are you listening to salesmen for your information? Isn’t it time to be the boss of your money, and trust data, information and time-proven systems?
 
 
The Bottom Line
If you wait for the headlines that the economy is in trouble, it will be too late to protect yourself. The December drop (which was the worst December since the Great Depression) is a warning shot that now is the time to be sure that your exit strategy is based upon a time-proven system and not Buy and Hope. 



​If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by June 30, 2019 to receive the lowest price and a complimentary 50-minute private prosperity coaching session (value $300). 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 for pricing and information. ​​​​

Other Blogs of Interest
What's Your Exit Strategy? 
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

How are you setting yourself up for the win? 

As we enter the 11th year of the current bull market, it’s key to remember that what goes up, can come down – rather rapidly. The 9.2% drop in the S&P500 in December 2018, is a stark warning that when the winds shift it can be too rapidly to properly protect yourself. That is why it is key to have a time-proven plan – one that can withstand financial storms. You don’t want to discover you’ve built your fiscal health with straw, as most people did during the Great Recession, when over 10 million homes were lost and the Dow dropped 55%.
 
So, What’s Your Exit Strategy?
How are you setting yourself up for the win? 
​
Real Estate
Real estate prices are higher than ever, and unaffordable in many cities. This is not a buy and flip environment. And it is definitely not the greatest time to consider buying a new home, even with the massive tax advantages that Americans receive. One of the worst mistakes you can ever make is to buy high in real estate. It can ruin your life for a decade or more. So, if you’re considering buying or selling real estate, you want to learn the most important key to a successful investment. Click to access that blog. 

Nest Egg
Are you suffering from buy high, sell low mentality (click to access that full blog)? Are you tempted to buy stocks now when stocks are back to an all-time high (afraid you’ll miss the party if you don’t)? Did you sell everything in 2009, during the Great Recession? If so, you are letting stomach acid and euphoria – emotions – rule your investing strategy. 

There is a time-proven, easy system that earned gains in the last two recessions and has outperformed the bull markets in between. Yet most money managers don’t use this system. Why? The status quo just isn’t set up to incentivize that. There are some brokerages moving in this direction. However they will attempt to sell you options trading and other high-risk investments to improve their profitability. That is why it is important to be the boss of your money, even if you have someone on staff to “manage” it. This is much easier than you might think, which is why I encourage you to learn the ABCs of Money that we all should have received in high school now.
 
 
The basics of a successful nest egg (401K, IRA, HSA, college fund) system are:

1. Always keep a percentage equal to your age safe,
2. Overweight safe in troubled or perilous times (i.e. now),
3. Know what’s safe in a world where stocks and bonds are in a bubble and money market funds have redemption gates and liquidity fees
4. Diversify your at-risk portion into 10 funds, small, medium, large, value, growth and four hot industries, and,
5. Rebalance at least once a year.

 
Annual rebalancing is one of the most important things that you can do to promote fiscal health. Buy and Hope has been riding the Wall Street rollercoaster, losing more than half in the last two recessions and barely crawling back to even before the next economic storm strikes. Annual rebalancing is a buy low, sell high plan on auto-pilot for your nest egg. Learn more in this blog.
 
​If you need help understanding what you own, call 310-430-2397 or email info@NataliePace.com  to learn more about receiving an unbiased 2nd opinion from me.
 
Trading
Trading stocks in the 11th year of the bull market, when stocks are at an all-time high, is like surfing in a hurricane. If you can’t surf ankle slappers, then you shouldn’t be surfing storms. There are times when any yahoo can pick a stock and make money, and other times when even professionals are hard pressed to eke out gains. The wind is in your face right now. Be careful.
 
Successful trading in individual stocks requires employing my 3-Ingredient Recipe for Cooking Up Profits, which includes using the Stock Report Card and 4 Questions for Picking a Winner. These strategies are outlined in my first book Put Your Money Where Your Heart Is, and taught at my Investor Educational Retreats. Call 310-430-2397 to learn more now.
 
In today’s world, with Tariffs, Trade Wars, Volatility, Astronomical Debt and Political Tensions, buying low and selling high require considering 3 factors:

1. What is the company capable of?
2. What will the industry do?
3. How will the macro economy effect the company?

 
Read more about these factors in my recent blogs on Tesla, cannabis, Zoom, Uber, Boeing, Lyft and Wells Fargo. 

​The Macro Economy
On June 19, 2019, the Federal Reserve Board is scheduled to meet, largely to determine whether or not to cut the interest rate. While some will applaud a cut because companies can continue to borrow money very cheaply, others will understand the risk is that Interest Rates Create Bubbles and the over-leverage party is ready to pop. Additionally, a rate cut signals economic weakness – which is never a good sign. In short, the macro economy could be a severe drag on any high performance of a single stock. Even Apple lost value during the Great Recession, when it launched the Smart Phone that changed our lives and disrupted the phone industry.
 
Additionally, it’s important to remember that Financial Engineering is Not Real Growth. Click to read that blog.
 
The Bottom Line
If you wait for the headlines that the economy is in trouble, it will be too late to protect yourself. The December drop (which was the worst December since the Great Depression) is a warning shot that now is the time to be sure that your exit strategy is based upon a time-proven system and not Buy and Hope. 



​If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by June 30, 2019 to receive the lowest price and a complimentary 50-minute private prosperity coaching session (value $300). 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 for pricing and information. ​​​

Other Blogs of Interest
Will the Feds Lower Interest Rates on June 19, 2019?
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.


​

On Friday, June 7, 2019, the Bureau of Labor Statistics reported that the increase in total nonfarm payroll employment (i.e. jobs) was only 75,000. Although this is bad news because that is less than is needed to employ new Americans entering the work force, the Dow Jones Industrial Average jumped 253 points. Why? Some investors were banking on the Feds lowering interest rates at their next meeting, while others were thrilled that we will not add Mexico to the Tariff List. 

​Why would investors be excited about a rate cut, and are the Feds likely to cut interest rates in 2019?
 
The current stock market rally has been built on corporate buybacks. Companies have been borrowing money very inexpensively, and using those leveraged funds to repurchase their own stock. This has many short-term benefits. It makes the company’s earnings look higher than they are, while pushing the price to earnings ratio down – making the share price look cheaper than it really is.
 
When markets rally, novice investors become more interested. Yes, this really amounts to companies baiting the water so that you’ll jump in and buy.
 
Buybacks are projected to hit an all-time high in 2019.
 

Lower interest rates fuel the buyback fire; higher interest rates make the practice more expensive. So, if the Feds lower the rates, the market rally party might, in theory, continue – even if the economy itself is cooling off. In fact, according to former Federal Reserve Board chairman Alan Greenspan, a 10% rise in stocks equates to a 1% rise in GDP. Clearly business-minded executives will benefit politically and financially if the rally continues, even if, ultimately, borrowing from Peter to pay Paul is not a sound business strategy.  
 
The Feds Are Taking Away the Punch Bowl
So, why is there still a rate raise projected for 2019 and another for 2020? Why would the Feds want to sober investors up, against the desires of the White House and many corporations, who would like to continue the Buyback Party?
 
There are two main reasons: financial imbalances and the Effective Lower Bound rate.
 
Financial Imbalances
Lower interest rates create bubbles. Today, real estate prices are higher than ever, and unaffordable in many major cities to the people who live there. Stocks are near an all-time high. Bonds and loans are highly leveraged, with new money flowing to those companies carrying the highest risk. Over 50% of investment grade companies are at the lowest rung – just one notch above junk bond status. (See the below Asset Bubble Chart.)
 
When bubbles pop, like they did in 2000 and 2008, the downturn can be steep and rapid. As Federal Reserve Board governor Lael Brainard said on March 7, 2019, “Elevated valuations and corporate debt could leave the economy more vulnerable to negative shocks. The market volatility in December is a reminder of how sensitive markets can be to downside surprises.”
 
Federal Policy and Rate Cuts
Another problem with persistently low interest rates is that there isn’t enough room for the Feds to cut interest rates to boost economic growth in a recession. Federal Reserve Board Governor Clarida explained this on May 30, 2019, when he said, “A lower neutral rate increases the likelihood that a central bank's policy rate will reach its effective lower bound in a future economic downturn. Such a development, in turn, could make it more difficult during a future downturn for monetary policy to provide sufficient accommodation to rapidly return employment and inflation to mandate-consistent levels.”
 
As you can see in the chart below, interest rates started out much higher before the Dot Com and the Great Recessions. The Feds had plenty of room to cut rates. And still the recessions were devastating, with the stock market losing more than half of its value. With interest rates starting less than half as high as they were in 2007, the Federal Reserve Board will have to resort to other policy tools to stabilize the economy.
 

​Will the Feds Cut Interest Rates to Let the Party on Wall Street Continue?
Judging from the Federal Reserve Board governors’ own words, there will not be a rate cut on June 19, 2019. However, there could be an abrupt end to the Federal Reserve Board’s deleveraging of its own balance sheet, which is currently scheduled to finish up at the end of September 30, 2019.
 
Governor Randy Quarles, who was appointed by the current President, believes that “monetary policy should be guided primarily by the outlook for unemployment and inflation and not by the state of financial vulnerabilities.” Governor Michelle Bowman, who was appointed on Nov. 26, 2018, might agree with him (and side with the President). However, Governors Brainard and Clarida, along with Federal Reserve Board chairman Jerome Powell, have all gone on record expressing concerns about financial imbalances, financial stability, the Effective Lower Bound interest rate and room to maneuver to boost economic activity in the next downturn. 

As Chairman Powell summed up on May 20, 2019 in a speech:
 
Business debt is near record levels, and recent issuance has been concentrated in the riskiest segments. As a result, some businesses may come under severe financial strain if the economy deteriorates. A highly leveraged business sector could amplify any economic downturn as companies are forced to lay off workers and cut back on investments. Investors, financial institutions, and regulators need to focus on this risk today, while times are good.
 
Bottom Line
The May 2019 jobs report was very weak. However, so was the February jobs report, which prompted the Feds to communicate that they would be patient about rates and would stop deleveraging at the end of September 2019. Prior to that announcement, their economic forecasts were still factoring in getting to a 2.9% Fed Fund Rate in 2019 and 3.1% in 2020. (The current projections are 2.4% in 2019 and 2.6% in 2020.) With 1Q GDP still looking reasonably well, and the 2nd quarter results to be released on July 26, 2019, there can be a lot of reasons to remain “patient” at this meeting.
 
Additionally, even though a mostly Republican Federal Reserve Board would be very interested in keeping the current market rally alive to keep the White House in the next election, the Federal Reserve Board has solid reasons for taking the punch bowl away from the Wall Street party. If the board governors are ruled by the data, and do not succumb to political pressure, then it’s hard to justify letting banks and corporations continue over-leveraging.
 
Forecast 2019
Corporations are still on track to set a buyback record in 2019. This should keep the markets more buoyant than they would otherwise be this late in the business cycle. However, as we saw in December, when companies are too aggressive with their buybacks in the beginning of the year, they find themselves tapped out later on. That is likely what happened in December of 2018, when the S&P500 saw the worst December since the Great Depression.
 
The markets slide at twice the speed when corporations are not buying up their own stock. 

What Should You Do?
The economy is cooling down. That is projected to start showing up in the GDP reports starting on July 26, 2019. Investors are forward looking. So, expect volatility and potential market weakness to show up in advance of that 2nd quarter GDP report. July 2019 could be a very challenging month, unless the corporate CFOs continue their buyback spending spree.
 
What this points to is that now is the time to make sure that you are safe, protected, properly diversified and hot. If your financial plan is longer than just a few pages, if you lost more than 1/3 in the Great Recession and if you haven’t made any changes, then you’re more vulnerable today than you were then. Wisdom is the cure.
 

If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by June 30, 2019 to receive the lowest price and a complimentary 50-minute private prosperity coaching session (value $300). 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 for pricing and information. ​​
​

Other Blogs of Interest
Should You Buy Tesla at a 2 1/2 Year Low? 
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Recently one of our tribe reached out and said she was thinking of buying tesla stock. Earning gains in any investment is never as simple as clicking the buy button. So I encouraged her to make sure that she had an exit strategy and examined how this investment would fit into her overall financial plan. These are two very common problems in investing. When you have a gut feeling about something and pull the trigger before you aim and before you know what you’re shooting at (what your goal and exit strategies are), then you are going to have a hard time being successful – particularly this late in the business cycle.
 
All of this becomes more perilous if you’re running and trying to shoot over your shoulder while being chased by a pack of wild boar, which is kind of like what investing in the 11th year of a bull market is like. Today, the markets are not in a “wind at your back” position. The economic forecast is not clear and sunny with smooth sailing. Rather, we are embroiled in a dark stormy night with lots of phantoms looming in the shadows that you’re probably not even aware of. (See the Asset Bubble Chart at the end of this blog for reference.)

What are the two most common mistakes you might make investing today?

1. Not understanding how this one investment fits into your overall financial plan.

2. Not having an exit strategy.


Individual Stocks Are Not Appropriate for Your Retirement Plan
Individual stocks require babysitting. So they are really not appropriate for your retirement plan, where the goal is to make money while you sleep so that you can earn a good living and live a rich life instead of babysitting your stocks. If you have pages of individual stocks in your retirement plan, you’re probably not as diversified as you think and paying more in fees than you realize. It is also likely that you lost money in 2018.
 
Invest Fun or Education Money (Vegas Money) in Individual Stocks
So if you’re not willing to babysit, and invest fun money or education money, i.e. not your nest egg, then investing in Tesla today at a 2 ½ year low is not the right choice for you. If you do want to invest and babysit then the amount you invest should be limited to the amount that you are willing to lose. Treat the investment like a trip to Vegas. Most investors are not as adept as Warren Buffett at buying low and selling high, and are going to be vulnerable to the person on the other side of the trade, who may be a hedge-fund manager with high-frequency trading systems and software on his side.
 
What’s Your Exit Strategy?
A solid exit strategy requires at least three considerations.
 

1. What can the company do?
2. What can the industry do?
3. What will the macro economy do?

What Can Tesla Do?
Tesla’s next quarterly earnings report, which will be released at the end of July/early August, is expected to be quite strong. In the 1st quarter 2019, Tesla delivered only 63,000 cars; in the next report there should be 90 to 100,000 cars delivered. That’s a lot more revenue for Tesla – with revenue conceivably above $6 billion, compared to $4.5 billion in the 1st quarter 2019 and $4 billion in the 2nd quarter of 2018. That kind of revenue should also put Tesla closer to cash positive again. (Tesla posted net income of $139 million in the 4th quarter of 2018, on $7.2 billion in revenue.) That could excite investors in the short term. However, sophisticated investors will also be looking at the macro economy and the industry itself. The Tesla Model 3 makes up 60% of the electric car market and is the top-selling luxury sedan in the U.S. (source: CleanTechnica.com). Tesla’s Model 3 sales have been so spectacular that GM and Ford have thrown in the towel on sedan manufacturing.
 
The Auto Industry
The auto industry is under attack on many fronts. Tariffs make the cost of steel and other widgets that go into our new smart cars more expensive. This is an industry that is seeing the slimmest profit margins on the planet already, and these new costs could definitely take them all into the red. Check out the Auto Stock Report Card below. 

Additionally, only 25% of 16-year-olds are getting drivers’ licenses today. Gen Z and Millennials prefer living in urban areas close to where they work, and taking a bike or an electric scooter for dinner and other local events. For longer distances, they grab a ride-share, rent a car or fly. So this means softer demand for cars going forward. Tesla actually benefits from that in that the Model 3 has become the fastest selling car in America by far, on consumer choice.
 
Additionally, the company is already a leader in autopilot and artificial intelligence. On his investor call of May 2, 2019, Elon Musk declared that autopilot will transform Tesla into a $500 billion company. Elon is known for hyperbole. However, he’s also known as one of the greatest inventors and CEOs the wold has ever known.
 
It’s important to remember that Tesla has only enjoyed one cash positive quarter in recent memory. Higher costs are going to make it harder for the company to generate cash, unless they are able to dramatically cut costs (which the company has placed as a top priority). That means another capital raise could be in Tesla’s future in the years to come, which is almost always tough on share price. There could be a great number of peaks and valleys before Tesla becomes the next Apple-like behemoth.

The Macro Environment
As we enter the 11th year of this current bull market, the politicians are screaming from the rooftops that the economy is strong and growth is outstanding. However, that message doesn’t seem to equate with how we feel about our lives. What is the disconnect? Housing is unaffordable for most people. Stocks are trading at an all-time high. Bonds have a massive amount of credit risk that’s under-reported. Consumer debt is higher than it was before the Great Recession. Public debt has ballooned to the moon, with $22 trillion in public debt and counting (which doesn’t include state, city or corporate debt and loans). We’ve all become keenly aware of what happens when you borrow from Peter to pay Paul. Sadly, anyone caught on the wrong side of the Great Recession has difficulty trusting what they’re hearing, when what they are seeing and smelling is nowhere near as rosy as the White House Tweets claim. We’ve heard the “Great Economy” rhetoric before – before the Great Recession and the Dot Com Recession and suffered the consequences of drinking the political Kool-Aid.
​
The Bottom Line
Do I think you can make money on investing in Tesla at $200 a share? It really depends upon you. It’s not going to be an easy road ahead. If you make money, it will be because you endure a lot of nasty headlines and stomach churning events and possibly even watching the share price go lower than you bought it for. Tesla is a company that has only two kinds of headlines – doomsday scenarios and heavenly vistas.
 
When you see the headlines turn sparkly and shiny, you may have only a small window before the macro economic reality will cast everything into darkness again.
 
So, what I’m really saying here, is: if you don’t know how to surf in hurricanes, you should not be investing in any individual company in the 11th year of the bull market, not even one you love. Your better strategy is to make sure that you are properly diversified and safe and protected from the next downturn. If you don’t have any hot slices in your nest egg, you might consider a hot slice of clean energy. Many of the clean energy ETFs have Tesla holdings (a small amount). Funds protect you from the volatility of any one company, but they also limit your upside, if Tesla does have a stellar second quarter at the end of July.
 

Full disclosure: I own shares of Tesla. 

If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by June 30, 2019 to receive the lowest price and a complimentary 50-minute private prosperity coaching session (value $300). 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 for pricing and information. ​​
​

Other Blogs of Interest
It's Time To Do Your Annual Rebalancing.
Cannabis Crashes. Should You Get High Again? 
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

I recently spoke with someone about rebalancing, and her response was, “I don’t want to day trade.” Annual balancing is not day trading. In fact, it is the most important thing that you can to preserve, protect and grow your nest egg. And here’s why.

1. Annual Rebalancing is a Buy Low, Sell High Plan on Auto-Pilot for Your Nest Egg.
2. This Alone Would Have Protected You From the Devastating Losses of the Great Recession and the Dot Com Recession. You can’t afford to lose more than half of your assets every 8-10 years.
3. What’s Hot and What Safe Change Every Year.
4. You Age a Year Every Year.
5. Your Action Plan Is Obvious Once You Are Properly Diversified.
6. Stick to Your Knitting.
   
   

And here’s additional information on each of these key points.

1. Annual Rebalancing is a Buy Low, Sell High Plan on Auto-Pilot for Your Nest Egg.
Annual rebalancing is not daytrading. It is a simple strategy for always being sure that you have enough safe and are properly diversified. The added benefit of annual rebalancing is that it forces you to do what you should be doing, i.e. trimming back when your assets have had a great run (selling high) and buying more when asset prices go down (buying low). The truth is that buying low and selling high is easy to say and hard to do? Why? Because it is completely against human nature. Also, when you ride the Wall Street rollercoaster up and down, you simply don’t have any money to buy low with. You have suffered so many losses that the only thing you can do is recover. (This happens in real estate, too.)

2. This Alone Would Have Protected You From the Devastating Losses of the Great Recession and the Dot Com Recession.
You can’t afford to lose more than half of your assets every 8-10 years. Annual rebalancing ensures this doesn’t happen to you. Let’s say that you had a spectacular year in 2007. If you use the old-fashioned Buy and Hope plan, then you would have lost 55% in the Great Recession. The losses were even more catastrophic in the Dot Com Recession, when NASDAQ lost 78% of its value (and took 15 years to come back to even).

Annual rebalancing would have ensured that you kept enough safe during both of those downturns. Those people who overweighted safe earned gains in the last two recessions and outperformed the bull markets in between. (On December 24, 2007, I posted a blog encouraging people to overweight up to 20% safe. I am encouraging extra protection again now.)

3. What’s Hot and What’s Safe Change Every Year.
Getting Hot: In 2007, clean energy was the top performing industry, earning 62% gains. In 2008, it was the worst performer. NASDAQ doubled the Dow in the wake of the Great Recession, so adding an extra slice of technology really spiced up the performance of your portfolio.
Getting Safe: In normal times, bonds are an easy way to get safe. However, with so much leverage in the world, bonds are quite vulnerable. Over half of the investment grade bonds are just one downgrade away from junk status. Many bond funds have 20% or more of junk bonds in them. Bonds lost money in 2018 and are vulnerable in the near future. In 2019 (and beyond), it’s very important to educate yourself on how to win in an over-leveraged world where most assets are in a bubble: stocks, bonds and real estate.

4. You Age a Year Every Year.
The basic rule of investing is to always keep a percentage equal to your age safe, and to diversify your “at-risk” investments. See the sample pie charts below.

5. Your Action Plan Is Obvious Once You Are Properly Diversified.
Most people are not properly diversified. Even if you have pages and pages of holdings, you might just have large cap growth and value over and over again. I’ve been doing a lot of second opinions this year, and not one person was properly diversified or had enough safe. Once you trim back all of that nonsense into a sensible, easy plan with ten diversified funds, then each year you simply: 

• Print out the pie chart of what you have,
• Personalize a new pie chart of what you should have (based upon your age, market conditions), and then,
• Make what you have look like what you should have (buying low and selling high)

 
6. Stick to Your Knitting.
This is an age-old adage in investing. If you have a time-proven plan (my easy-as-a-pie-chart nest egg strategy), then you stick to it, no matter what kind of noise you hear in the media. In 1999, you would have heard a lot of self-proclaimed experts claiming we were in a New Economy when Dot Coms didn’t have to make any money at all. In 2007, you were drowned in ads offering no down, Liar’s Loans and easy access to your home equity ATM machine (even though that would send over 10 million homes to auction in the coming years). Today, you’re hearing how great our economy is doing, despite the facts that:

• 2019 is predicted to slow to just 2.1% GDP growth.
• Homes are unaffordable in many U.S. cities,
• Debt is absolutely astronomical,
• Millennials have to delay their home purchase by an average of 7 years,
• Most American households have less than $5000 saved for retirement and are drowning in debt.
  
  

So, now, when the markets are back to all-time highs, before the 2nd quarter 2019 GDP report on July 26, 2019 (which is predicted to reflect slower growth), is a great time to rebalance your nest egg (your 401K, IRA, Health Savings Account, etc.). The slices that have gotten really fat and have earned a lot of games are going to need to be trimmed back to their appropriate size. That’s called selling high. The slices that have gotten super thin because they’ve been underperforming need to be beefed up to the appropriate size. That’s called buying low.

Of course, all of this requires you actually knowing what you own, which is why I began offering 2nd opinions. Call 310-430-2397 to learn more.

Additional Tips About What’s Hot and What’s Safe

1. Bonds are vulnerable.
2. Money market funds have redemption gates and liquidity fees.
3. CDs often have an opportunity cost. Some are not FDIC insured.
4. Getting safe is a two-step process. First you must keep your money, so be sure that your cash is in an FDIC insured account. Then you want to think about safe income producing hard assets that you purchase for a good price.
5. Most hard assets are not a good price right now.
6. However things like solar panels and other energy efficiency upgrades – including perhaps a solar water heater, solar tubes, a gray water system or better insulation in your home, that dramatically reduce your utility bill – could be a great investment right now. The energy efficiency tax credits are set to start expiring at the end of 2019. So that’s low hanging fruit for you.
7. If you start researching now into what safe, income-producing hard asset is right for you, and understand how to do the math and make sure that it is a viable business without taking on a second or third job, then when real estate prices become affordable again, it will be a good time for you to make your move. As they say, when preparedness meets opportunity therein lies success. 
   
8. If you are going to add cannabis as a hot, you will need to select individual companies. The industry is too new to find a reputable fund.  Also, these companies are very volatile, so you’ll have to adopt a strategy of taking your profits early and often (rather than just annually rebalancing them). I added cannabis as a hot slice in October and by March the companies I highlighted had doubled. They then pulled back again. Some, like Tilray and Aphria, are trading near their 52-week lows. Not all cannabis companies are created equal (some are pump-and-dump schemes), so be sure to read my cannabis blogs.
9. Having four hot slices in your nest egg pie chart adds a lot of performance. Many times my hot slices have doubled within one or two years. Again, this is not day trading. It’s maximizing performance.
   
10. If you’re going to buy solar or any other hot asset, then you need to know how to rebalance after you make that hard asset acquisition. Hard assets are not included in your nest egg pie chart, but they are part of your wealth and assets. This is something that we spend a full day on at the Investor Education Retreats. Call 310-430-2397 to learn more. 
     
    
    

 

If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by June 30, 2019 to receive the lowest price and a complimentary 50-minute private prosperity coaching session (value $300). 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 for pricing and information. ​

Other Blogs of Interest
Cannabis Crashes. Should You Get High Again?
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

​Each time I do an updated blog on cannabis, there’s an impressive newcomer (Green Growth Brands), a new leader (Aphria) and a former unicorn, who is trading for a song (Tilray). The most important thing to remember about investing in the fastest growing industry in the world is that the share price is extremely volatile. This is not due to the future prospects of the industry. It has a lot more to do with valuation, short sellers, and the rollercoaster nature of equities in the late stage of the business cycle.
 
Check out the 52-week highs/lows below. As you can see, MedMen, Aurora Cannabis, Aphria and Tilray are all trading near their 52-week lows, while boasting explosive revenue growth (light years beyond any other industry).
 

So, what’s the story? Why would these unicorns be thrown under the troll bridge?
 
MedMen: The Cool Store Popping Up All Over Town.
MedMen has had an executive exodus of late, which is typically a terrible sign. The former CFO filed a lawsuit against the company, and accused the co-founder CEO Adam Bierman and co-founder president Andrew Modlin of egregious behavior, ranging from petty bad language to potentially serious financial accounting policies. Three executives, including the COO, followed the former CFO out the door within a few short months. The executive exodus has killed the share price.
 
However, Medmen’s growth is undeniable. There is a line outside their stores from open to close. Former LA Mayor Antonio Villaraigosa is on the Medmen board, alongside many other seasoned executives. Spike Jones filmed a stunning, poignant mini-film marking the monumental progress from Pot Prohibition and the War on Drugs to legalization. 

Aphria: Don’t Mess With Whole Foods
Aphria has successfully rejected a hostile takeover bid by Green Growth Brands, and will even put a little money in its coffers as a result. Under the leadership of interim CEO Irwin Simon (former chairman and CEO of Hain Celestial) and president Jakob Ripshtein (former CFO of Diageo North America), Aphria is expanding and stabilizing at the speed of light. The company just added former co-CEO of Whole Foods Market Walter Robb to its board.
 
Aphria’s share price took a hit because of a massive loss in the most recent quarter. However, as you can see from the Stock Report Card, most companies are reporting losses as they attempt to expand rapidly enough to meet global demand for products. That’s a good reason to lose money.
 
Tilray: The Wounded Unicorn
Tilray’s stock dropped to its 52-week lows in mid-April. As with the volatility in other companies, Tilray’s poor performance has a lot to do with short sellers and lofty valuations. The company is having difficulty meeting demand, but has recently addressed that issue with a spate of acquisitions and expansion plans. Tilray is set to report earnings on May 14, 2019 (after the market close). That report may not look as impressive as it could, due to the supply chain issues. However, the price is already reflecting this.
 
Tilray’s executive team and board of directors are some of the most impressive in the industry. The advisory board includes Governor Howard Dean, the former Vice Chancellor of Germany and other global government leaders. Tilray recently inked a deal with celebrity brand marquise company Authentic Brands Group…
 
Green Growth Brands: The New Secret On the Block
Victoria’s Secret executives think cannabis is sexy. The Green Growth Brands team, which is made up of former Victoria Secret executives, made strong moves very fast, including a hostile takeover bid for Aphria, which failed. That was an expensive lesson, which will likely show up in the 4th quarter fiscal earnings report in late summer/early fall. (The next earnings release at the end of May will report earnings through March 31, 2019, and thus miss the Aphria takeover expiration.) Despite that setback, the acquisitions continue, and the Green Growth Brands website makes cannabis consumption look heavenly. Will an angelic catwalk be in the company’s future?
 
​ 
The truth is that the cannabis industry is so hot that most of these companies are going to see splashy headlines in the months and years to come. However, with such volatility in share prices and the lofty valuations already in play for many of these companies, you’ll be best served to follow the age-old adage Buy Low, Sell High on auto-pilot (with limit orders). Many investors have enjoyed massive returns over the past year using that strategy! The returns on these cannabis companies will get you high, as long as you don’t crash hard when short sellers end the party…
 
 
Also, be careful of penny pot stock scams that are still being heavily marketed by social media scam artists. If you don’t know how to use the Stock Report Card and 4 Questions to evaluate which companies are legit and which are pump-and-dump schemes, then your next move must be education. If you’d like to learn more about these strategies firsthand, join me at my Oct. 19-21, 2019 Retreat.
 

If you'd like to learn time-proven strategies that earned gains in the last two recessions and have outperformed the bull markets in between, join me at my Wild West Investor Educational Retreat this Oct. 19-21, 2019. Click on the flyer link below for additional information, including the 15+ things you'll learn and VIP testimonials. Call 310-430-2397 to learn more. Register by June 30, 2019 to receive the lowest price and a complimentary 50-minute private prosperity coaching session (value $300). 

I'm also offering an unbiased 2nd opinion on your current retirement plan. Call 310.430.2397 for pricing and information. ​

Other Blogs of Interest
Are You Suffering From Buy High, Sell Low Mentality?
Financial Engineering is Not Real Growth
The Zoom IPO. 
10 Rally Killers. Fix the Roof While the Sun is Shining.
Uber vs. Lyft. Which IPO Will Drive Returns?
Boeing Cuts 737 Production by 20%.
Tesla Delivery Data Disappoints. Stock Tanks.
Why Did Wells Fargo's CEO Get the Boot?
Earth Gratitude This Earth Day. 
Real Estate is Back to an All-Time High. 
Is the Spring Rally Over?
The Lyft IPO Hits Wall Street. Should you take a ride?
Cannabis Doubles. Did you miss the party?
12 Investing Mistakes
Drowning in Debt? Get Solutions. 
What's Hot in 2019?
The Debt Ceiling Was Hit (Again) on March 1, 2019.
How Bad Will the GDP Report Be?
2019 Investor IQ Test
The State of the Union
CBD Oil for Sale.
The High Cost of Free Advice. 
Apple's Real Problem in China: Huawei. 
2019 Crystal Ball.
2018 is the Worst December Ever. 
Will the Feds Raise Interest Rates? Should They? Learn what you're not being told in the MSM.
Why FANG, Banks and Your Value Funds Are in Trouble.
When the Santa Rally is a Loser, the Next Year is a Bigger Loser. 
Russia Dumps Treasuries and Buys Gold
OPEC and Russia Cut Oil Production. 
Trade Deficit Hits an All-Time High. Wall Street Plunges 800 Points. How to Protect Yourself.
​Rebalance and Get Safe in December. Here's Why. 
The Best Investment Decision I Ever Made. 
What's Safe for Your Cash? FDIC? SIPC? Money Markets? Under the Mattress?
The Real Reason Stocks Fell 602 Points on Veterans Day 2018.
Will Ford Bonds Be Downgraded to Junk?  
6 Risky Investments. 12 Red Flags. 1 Easy Way to Know Whom to Trust With Your Money.
Whom Can You Trust? Trust Results.
October Wipes Out 2018 Gains.
Will There Be a Santa Rally in 2018?
The Dow Dropped 832 Points. What Happened?
​Bonds are In Trouble. Learn 5 Ways to Protect Yourself.
Interest Rates Projected to Double by 2020. 
5 Warning Signs of a Recession.
How a Strong GDP Report Can Go Wrong. 
Should I Invest in Ford and General Electric?

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.