Dear Reader,
Today I want to share with you an investing strategy that works in any market.
I've used this approach myself for 35 years - a blueprint I learned from people like Warren Buffett and Peter Lynch.
My goal with today's video is you learn:
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How to protect your wealth in the event of a crash, and…
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How to turn crashes into the greatest money-making opportunities of your lifetime.
A crisis is always the best time to make money in the stock market.
The "good" news is, since the year 2000, we've averaged one crisis or market crash every 4.8 years on average.
Think about it…
We had the 2000 dot-com crash…
The 2001 9/11 attack crash…
The 2008/'09 financial crisis and real estate crash.
We had the 2020 COVID crash and the 2022-23 inflation crash.
Sometimes the market crashes because of impossible-to-predict events like 9/11 or the COVID crash, and when the smoke clears and the panic passes, we see a "snap-back" rally. And that's great - we get to pick up stocks cheap and see them make fast gains.
But most of the time, before a crash happens, the warning signs are there for everyone to see.
Right now we see a lot of warning signs.
The Buffett Indicator - Market cap-to-GDP - is at an all time high.
The Shiller PE Ratio hasn't been this high since the dot-com crash.
We see these warning lights flashing "danger! danger!"
It is time now that we prepare ourselves for what we know is likely to be a hard hit against a wall.
The reason I wanted to talk to you about this today is that the biggest mistake I see people make is they ride stocks all the way up during a bull market…
And then ride them all the way back down during a bear market.
And, as we learned in the 2000 dot-com crash, stocks could stay low for a decade after a crash - especially bad ones.
So, today I am going to share with you four steps to prepare for a coming market crash.
Because, again - it happens every 4.8 years on average.
And again - we see the warning signs flashing red hot right now.
>> 4 Steps to Prepare for a Coming Market Crash
Step 1: Sell your most-speculative stocks.
Remember something - all stocks go down in a market crash.
But the most speculative stocks go down the most and the fastest.
What is a speculative stock?
A good rule of thumb I like to use is, does the company earn consistent profits?
If a company does not earn consistent profits, it's not uncommon to see an 80%, even 90% stock price decline during a market panic.
Many of these stocks take years to recover, if they ever recover at all.
Given the market is now trading at historical highs, while we have issues like astronomical debt, inflation, and debasement of our currency…
I would sell any of these stocks as soon as I could.
Step 2: Take the cash from the sale of your speculative stocks and invest it in Federal Money Market Funds.
Now that you've sold your weakest positions, you want to put that money to work for you while you wait.
You want it in money market funds, but not just any money market funds.
The safest ones are funds that invest in short-term U.S. government securities and/or repurchase agreements.
You want to be in short-term government securities where the interest you can collect is at the high end of the yield curve.
A good example of this is the Vanguard Federal Money Market Fund. The symbol is VMFXX.
But there's one more thing to consider.
In real market crashes, money doesn't just move into cash — it moves out of paper promises entirely.
When confidence breaks, investors look for other assets that don't depend on banks, brokers, or other third parties…
That's why gold keeps re-emerging at the center of every major financial reset.
That's why I just published an exclusive report on how to properly play the gold rush and protect yourself from this volatile market.
Make sure to read it right away if you haven't yet.
Step 3: Prepare a shopping list of stocks.
If you're like a lot of people, for years you've watched from the sidelines as certain stocks have marched higher and higher, and people that are not you have gotten richer and richer.
Facebook, Amazon, Google, Nvidia, Microsoft, Apple - you name it.
Now, folks who got in early, they made a fortune.
But you missed out.
By the time you knew these were the things to own, it was too late.
Not anymore.
The great thing about a market panic is you get a second chance to buy the stocks you wish you owned.
You get a "Mulligan" - that's what they call a do-over in golf.
I got this chance…
I remember in the nineties watching Starbucks march higher every. single. day.
I watched the stock go from $20 to $40 to $50 to $60 to $70 to $100 a share…
But I never owned a single share.
The stock was always too expensive for me.
I knew that one day the market would give me an opportunity to buy that stock. If I was patient enough, a time would come when it would price right into my strike zone.
When the market crashed in 2008-09, Starbucks stock collapsed to $20 a share.
That's when I started buying.
And I happily bought shares all the way down to $13.75.
Within four years, the stock was back at $100 a share.
Here's my point: Starbucks was on my "shopping list" before the crash happened.
Along with a dozen other companies including American Express, FactSet Research, Autonation - these were all huge winners for my personal portfolio.
This is why it's so important that you sit down in advance and write your shopping list of stocks, before a crash happens.
Step 4: Get ready to pounce.
The great thing about a market crash is that you don't have to be a financial wizard to make big money.
You just have to be mentally and financially prepared.
If you've followed these steps…
Sold your speculative stocks, put that money in mutual funds that invest in short-term U.S. government bonds, written down a list of killer stocks you want to own…
Now, all you have to do is wait. Like a hunter, it pays to be patient.
But how do you play out your plan once the market actually does crash?
Let's say you've raised $10,000 from selling your weakest position, and you've invested that money in short-term U.S. government bonds.
That $10,000 you'll earmark for 10 killer stocks - category killers.
So you may plan to put around $1,000 into each of 10 stocks.
Now, you steel yourself for one of the most unnatural acts in investing: buying a stock when it's crashing.
That's a hard thing for a lot of folks to do.
I look at it like I'm buying a dollar for 50 cents (or 40 cents, 30, cents, 20 cents - whatever it is).
Just like calling the top is hard to do, so we make preparations around a top for when the crash comes…
Timing an exact bottom is unlikely.
So, when do you begin to buy?
A good rule of thumb is to look at the company's price-to-book value.
During good markets, great companies tend to trade at 7- to 10-times their book value.
For example, Amazon is trading around 9-times book value. Facebook around 8, Google 9, Visa 15, Starbucks 8, Tesla around 9/9.5, Microsoft 12.
The general rule of thumb is the stronger the business, the higher its price-to-book value will be.
That's because the stock market rewards companies that earn high returns on capital.
Using that as an example, I would start buying any of these stocks at four or five times book value.
Let's use Meta (Facebook) as an example.
If I'm to invest $1,000, my first $250 would be at five-times book value.
My second $250 would be at four-times book value.
My third $250 would be at three-times book value.
My last $250 investment would be at two-times book value if I ever got that lucky.
If not, I would buy it at the other values on the way back up.
The great thing about this strategy is you don't need to be a financial wizard.
You just need patience and foresight.
And character.
It takes a lot of character to sit with all that money and do nothing.
But that's what we're doing.
We're hunters.
We've got to patiently wait for the thing to come into our target, into our sights, and then, bang!
This is how in market crashes you 10x your money over the following 2, 3, 4 years.
It really pays to wait.
It's how you could turn $10,000 into $100,000…
$100,0000 into $1,000,000…
$1,000,000 into $10,000,000.
The biggest thing you need is patience.
Have a great day.
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