Bear Markets and Stop Losses, Oh My!

Time for capital preservation. You are receiving this email because you signed up to receive emails from True Market Insiders, rebranding to Sector Edge. [Unsubscribe here]( Keep the emails you value from falling into your spam folder. [Whitelist True Market Insiders](. Forgot your login information? Click [here](. [Image] Weekly Market Update Today is June 4, 2022 Hey TMI Subscriber, This bear market seems to be hitting right on time. In fact, most market crashes tend to happen in the second half of the year. It’s true. Barring Black Swan events like COVID that triggered a decline that started in February 2020… Most of the major crashes, including 1907, 1929, 1937, 1987, 2008 occurred between July and October. Another interesting fact is that the two most famous stock market crashes, in 1987 and 1929, struck exactly 55 calendar days from their tops in late August and early September. Today, when we look at the S&P 500 index, it took almost an entire year for the index to begin its downtrend after hitting an all-time high on Dec. 27, 2021—a 95% gain since the lows of March 2020. And the S&P 500 didn’t first slip (temporarily) into bear territory until May 20. Through yesterday (June 2), it’s fallen just 13% since that high. So, this market “crash” took far longer than the two most famous ones to materialize, which may suggest we’ve still got a long way to go before seeing improvement. You may have not believed, or wanted to believe, the market would collapse. However, your focus today shouldn’t be on what you do or don’t believe. Or what this guy or that woman said on TV. And certainly not about your gut feeling. You should be zeroed in on preserving profits and capital. One of the most popular and easy ways to do this is by setting a trailing stop loss. It allows you to sleep at night and take control of your investments from the get-go. A couple of studies clearly show the strategy works. A 2008 paper from the Massachusetts Institute of Technology found that a simple 10% stop loss allowed funds invested in the stock market to produce higher returns than bonds 70% of the time. That occurred during the entire 54-year period studied from January 1950 to December 2004, including, most significantly, the Internet Bubble. Another combined study from the University of Colorado, Washington University, and Tsinghua University, applied momentum strategies based on a 0% stop loss over an 85-year period from January 1926 to December 2011. All U.S.-listed companies on the NYSE, AMEX and Nasdaq exchanges decreased losses from 65.34% to 23.69%. Even better, profits increased by 71.3% monthly while volatility dropped by 23%. Trailing stops can mean the difference between watching your 401k or brokerage balances flourish or flounder. Here’s a simple example of how to set one. You buy X stock at $50. You’re confident in its upside potential because it checks all of the True Market Insider boxes. However, because of so much market volatility, you also want protection. So, you place a trailing stop at $45 or $10% below its high. Just as you expected, X stock rises quickly to $100 before selling off. Your trailing stop, meanwhile, has followed the stock up and is sitting 10% from its top or at $90. The selling didn’t stop there, and stock X eventually fell further. But since you set your trailing stop at 10% from X stock’s high, you sell some or all of your shares for $90. You pocket a 80% profit while let-it-ride investors scramble to contain losses. It’s just that simple. ***** Now, if you want access to all the tools that Chris Rowe and the rest of the TMI team use to gauge the market, be sure to [watch this presentation by clicking here](. He’ll also tell you [specifics on how to stay safe]( during the bear market and keep your portfolio growing. Enjoy this past week’s TMI articles.   This Week in True Market Insider May 30 - June 3, 2022 [This Summer, Here's How To Hedge Against Your Advisor's Mistakes — Chris Rowe]( Chris Rowe finally reveals his [new market “playbook,”]( one that lets you make money as the market rallies over the short term, and when the market puts in a new low after each short-term rally.   [Facebook Live Replay - Where To Put Your Money During the Bear Market — Chris Rowe]( Chris Rowe hosted a [Facebook Live event]( on June 1 and reviewed why the bear market still has a long way to go, when you will see the market bottom, and provided a few trade ideas to get you through.   [How To Set Yourself Up For Major Gains During This Crypto Bear Market — Marco Wutzer]( Bitcoin is down over 50%, other leading coins are down anywhere from 50% to 80% since the beginning of 2022. Learn why Marco Wutzer says this is [not the time to abandon crypto](.   [A Love-Hate and Profitable Relationship with Big Oil — Costas Bocelli]( You may feel helpless against rising gas prices, but you can more than cover the costs at the pump by [investing in the Energy sector]( specifically the oil producers. Just ask subscribers to Costas Bocelli’s trading services.   [Oil Companies Pumping Profits, Dividends (But Skimping on New Production) — Karen Riccio]( Bonuses and pay raises are no longer tied to production for oil executives. Instead, it's profitability. And Karen Riccio says that means [extra money for dividends and stock buybacks]( that benefit investors.   Copyright © 2022 True Market Insiders, All rights reserved. Our mailing address is: 7901 4th St. N STE 6113 St. Petersburg, FL 33702 Want to change how you receive these emails? You can [change your preferences here]( DISCLAIMER The information contained herein has been prepared without regard to any particular investor’s investment objectives, financial situation, and needs. Accordingly, investors should not act on any recommendation (express or implied) or information in this material without obtaining specific advice from their financial advisors and should not rely on information herein as the primary basis for their investment decisions. True Market Insiders LLC is not an investment advisor and is not licensed to give specific financial advice. The chairman of True Market Insiders, Chris Rowe, is also the CEO, CIO and owner of Rowe Wealth Management LLC, which is not owned by and is not the owner of True Market Insiders. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources believed to be reliable (“information providers”). However, such information has not been verified by True Market Insiders or the information provider and TMM and the information providers make no representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein. TMM and the information provider accept no liability to the recipient whatsoever whether in contract, in tort, for negligence, or otherwise for any direct, indirect, consequential, or special loss of any kind arising out of the use of this document or its contents or of the recipient relying on any such recommendation or information (except insofar as any statutory liability cannot be excluded). Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice. Neither the information nor any opinion expressed shall constitute an offer to sell or a solicitation or an offer to buy any securities, commodities or exchange traded products. This document does not purport to be complete description of the securities or commodities, markets or developments to which reference is made. Unless otherwise stated, performance numbers are based on pure price returns, not inclusive of dividends, fees, or other expenses. Past performance is not indicative of future results. Potential for profits is accompanied by possibility of loss. You should consider this strategy’s investment objectives, risks, charges and expenses before investing. The examples and information presented do not take into consideration commissions, tax implications, or other transaction costs. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Some performance information presented is the result of back-tested performance. Back-tested performance is hypothetical (it does not reflect trading in actual accounts) and is provided for informational purposes to illustrate the effects of the True Market Insiders LLC strategy during a specific period. The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. Relative Strength is a measure of price momentum based on historical price activity. Relative Strength is not predictive and there is no assurance that forecasts based on relative strength can be relied upon. Back-tested performance results have certain limitations. Such results do not represent the impact of material economic and market factors might have on an investor’s decision making process if the investors were actually managing money. Back-testing performance also differs from actual performance because it is achieved through retroactive application of a model investment methodology designed with the benefit of hindsight. True Market Insiders believes the data used in the testing to be from credible, reliable sources, however; True Market Insiders makes no representation or warranties of any kind as to the accuracy of such data. All available data representing the full platform of investment options is used for testing purposes.