How to protect yourself from the market crash

Ohh it’s coming [Click to view in browser](. Dear Reader, We have some BIG UPDATES for all you Markets and Minds subscribers. [And you need to take action now to make sure you don't miss out!]( Our newsletter got a complete makeover. We overhauled the format and layout of the newsletter, making it easier to read and simpler to follow. And gave it a nifty new title - THE JUICE [But you won't receive this newsletter unless you sign up HERE.]( Because pretty soon, Markets and Minds will disappear FOREVER! Proprietary Data Insights Financial Pros Top Value Stock Searches This Month Based on P/E Ratios Rank Name P/E Ratio #1 Big 5 Sports 6.4x #2 Intel 9.6x #3 Northrup Grumman 12.4x #4 Bit Digital 12.3x #5 Alcoa 11.0x What is a value stock? Value can be subjective. Yet, most investors look at stocks with lower price-to-earnings ratios as being ‘value’ plays. As we point out in our main story, if the Fed is expected to raise rates, value stocks become more interesting relative to growth plays. These stocks typically fall into the consumer defensive sector including industries such as grocery stores, staples, and the like. However, you should also consider stocks with strong price-to-cash-flow ratios. Earnings can be notoriously volatile and easily manipulated. Cash isn’t. And at the end of the day, we pay our bills with cash, not earnings. So as you peruse stocks and create your watchlists, don’t just limit yourself to low P/E ratios. Consider companies with strong and consistent cash flows. Sponsored [Get Our Best Stock Ideas Every Weekday]( [Backing You Get Yours GIF - Backing You Get Yours Danny Devito GIFs]( Get investment ideas and recommendations broken down into digestible analyses And it's absolutely free. [Click here to learn more.]( Investments How to protect yourself from the market crash Key Takeaways - Market declines happen but that doesn’t mean individual stocks or indexes will decline immediately. - Two strategies to consider are dollar-cost-averaging into stocks and switching from growth to value stocks. - Also, consider dollar-cost-averaging out of positions that are overvalued and reallocating capital to index funds. Market crashes are inevitable. You can’t always predict them, but you CAN do something to protect yourself while participating in the upside. Don’t sell everything Just because markets can crash doesn’t mean they will immediately. Here are some fast facts to set your straight: - Despite insane valuations, the Nasdaq 100 doubled from October of 1998 to the middle of 1999…and then again in less than a year! - Amazon (AMZN) started trading in 1997 and didn’t turn a profit until 2001 (which was only a penny per share) and didn’t hit a price-to-earnings ratio below 100x from 2013 until 2019. - Rivian (RIVN) hit a valuation greater than Ford (F) this year, declined by 25%, and is still up more than 30% from its IPO price. The point is stocks can go up much further and stay high much longer than many realize. Consider that when the Nasdaq went gangbusters during the dotcom bubble, the S&P 500 only gained 68%. Even if you managed to capture just 25% of the Nasdaq’s move with 10% of your portfolio, you would have beat the S&P 500 by more than 8%. Do this instead We want to give you two different strategies to help you manage risk when you think a decline might be coming. The first is known as dollar-cost averaging. Warren Buffett is a big fan of this method. Dollar-cost-averaging means buying into stocks at regular intervals over time. This is essentially what you do when you contribute to your 401K. The premise is you can’t time the market. So, dollar-cost-averaging is the best way to optimize around this problem. The second strategy is specific to the current market conditions. Assuming the Fed plans to raise rates, that makes high growth more expensive and current profits more valuable. Why? Because higher interest rates mean you earn more for your money each year from US treasury debt which is safer. So, investors want to be compensated with cheaper share prices. With that in mind, companies with consistent price-to-earnings (P/E) ratios and cheap valuations should do better, like Tyson (TSN) or Kroger (KR) than those based on future earnings such as Tesla (TSLA) or Amazon (AMZN). The bottom line: Just because markets are ‘overpriced’ doesn’t mean they will crash. On the other hand, crashes can and will happen. With that in mind, dollar-cost-averaging can also be used to exit positions. There’s nothing wrong with taking profits over time. If a stock has had a nice run, you can always sell shares and put your money back into an index fund. News & Insights Freshly Squeezed - [10 Best Material Stocks To Buy Now]( - [The Fed's Moral Hazard Monster Is About to Lay Waste to "Wealth"]( - [Experts on Inflation: Prognosis, Political Fallout and Who’s Really to Blame]( [Make sure to sign up for The Juice to keep receiving our premier investment newsletter.]( # [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [whitelist us](. Update your email preferences or unsubscribe [here](. View our privacy policy [here](. Copyright ©2021 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc. newsletter is for information purposes only and opinion-based. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or against losses. No representation or implication is being made that using any of these methodologies or systems will generate returns or ensure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](