Don't Let a Good Market Crisis Go to Waste

John F. Kennedy got at least one thing wrong about China...

When the former president ran for office, he talked about the Chinese word for "crisis." He said the word was composed of two characters – one of which represented danger and the other, opportunity.

Since then, the phrase has become a favorite saying in the worlds of business, education, and politics. Other iconic presidential candidates borrowed it, including Richard Nixon and Al Gore.

But the translation isn't quite accurate. The character for "danger" is correct. But the second part represents a crucial point, or when something changes. This version better matches our typical definition of crisis and doesn't equate perfectly with opportunity.

But despite JFK's botched translation, the lesson still applies to investing...

A market situation that appears dangerous can be a turning point – and an opportunity.

The stock market is full of risks and rewards. Right now, the market is down roughly 20%. That looks very scary.

But it's also an opportunity to see strong returns. In the long run, you buy low and sell high, not the other way around. Yet people are still selling at the bottom of this market, desperate to get out.

I'm not saying this is the absolute bottom. But when we look at Uniform earnings for corporate America, our Uniform credit ratings and analysis, and our Earnings Call Forensics, we see strong management sentiment and low bankruptcy risk.

So where others see a dangerous market, we see a wonderful opportunity. We shouldn't let this crisis go to waste. We have the chance to take advantage of today's setup, which is why you should buy into the market right now.

We recommend spreading out investments into U.S. equities by dollar-cost averaging over the next 10 months. (Dollar-cost averaging means investing a set amount at regular intervals, regardless of what shares are doing.)

In a volatile market like we're seeing today, it can be dangerous to put money in all at once. It's almost impossible to know exactly where the bottom will be. A prudent investor buys a portion of the total planned investment on a regular schedule, no matter what the daily stock market blips show.

By spreading out your investments, you'll be able to safely buy into the market when it's cheap.

This volatility is also why you should trust reliable signals – and ignore the financial media's unfounded sensationalism...

Our unique, proprietary market indicators have served us well in the past. And they're flashing green now.

We believe investing in U.S. equities today will allow you to do very well, regardless of where you live around the world. We're seeing strong earnings, lower valuations, a low chance of bankruptcy, and improving management sentiment, not to mention an increasingly strong U.S. dollar. That all bodes well for the markets in the long term.

In investing, as in life, there are always ups and downs. But those downs open the door to a chance at fantastic gains if you're prudent.

JFK's translation may have been a little off... But when the market hits its next major turning point, you won't want to miss that opportunity.

Wishing you love, joy, and peace,

Joel
July 15, 2022