Make (Big) Money in Any Market

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So what if the market drops a little from time to time? That's inevitable, and in the long term, healthy.

The fact remains we're in a bull market. We have been since March 2009.

But now, especially with some early 2014 swings, investors may be wondering.

How long does this bull have to run and what should we do next?

I don't have a crystal ball… but I do have 30 years' experience – starting in 1982 on the floor of the Chicago Board Options Exchange, then running a big bank's hedge trading, then a Wall Street trading desk, and finally managing my own hedge funds.

I know many investors stick to a buy-and-hold strategy or more actively trade. There's a place for both to maximize this market.

But before you can start making money in the market, you need to know what's really happening…

This Bull Market Has Just Begun

You have to plan how you're going to invest based on where you see the market going and how it's going to get there. It's all about the most important underlying aspect of the market, any market; it's about riding the major trend.

This market's major trend is up. And, as we've said, it's going to continue.

We didn't just get here magically; we followed a certain path, and it's not veering soon. In the U.S. we're close to market highs across all the major benchmarks, up from those 2009 lows.

The long rally wasn't so much a blazing bull market as it was a major bounce off the devastating selloff in financial assets that spawned the Great Recession.

Remarkably, after all is said and done we're only about 15% higher than the old 2007 market highs. In other words, the new bull market has just begun. Here's why:

Stocks moved higher foremost because they were grossly oversold…

Low interest rates allowed corporations to reengineer their balance sheets…

And huge layoffs, inventory liquidations, and deleveraging all "streamlined" companies.

Then, as emerging markets recovered faster than developed economies, global trade increased diversification of revenue streams. Margins began to increase, which buoyed bottom-line profitability, and as the world crawled out of its stupor, top-line revenue growth expanded.

Ultimately multiple expansions took equities back to their 2007 highs, as investors reacquired their faith in capital markets, earnings, and growth prospects. The second half of 2013 was a momentum-driven boost that set the stage for the new bull market.

That's our starting point. There's something else at play here, something underlying, something very big. As I alluded to in my last piece, while the demand for equities has been strong, there are far fewer companies and shares to invest in here in the U.S. The demand equation is itself extremely bullish.

The U.S. economy is healing, too slowly for sure, but it isn't contracting. Globally, other developed economies and emerging markets are a mixed bag, but we're all in this together and we'll eventually all get through the "deleveraging" and "corrective" phases necessary for global growth to firm up and expand.

If U.S. economic growth picks up, and over the next four to eight quarters global growth picks up, we're only in the first leg of a generational bull market. I believe equities could double from here and potentially go a lot higher after doubling.

Of course that doesn't mean there aren't risks on the horizon. There are plenty of risks. But to make money you have to have a starting place from which to plan your moves, and mine is that we're going higher, eventually a lot higher, that's the major trend.

There are two ways to play the rising market from here.

Join the conversation. Click here to jump to comments…

About the Author

Shah Gilani is the Event Trading Specialist for Money Map Press. He provides specific trading recommendations in Capital Wave Forecast, where he predicts gigantic "waves" of money forming and shows you how to play them for the biggest gains. In Short-Side Fortunes, Shah shows the "little guy" how to make massive size gains – sometimes in a single day – by flipping large asset classes like stocks, bonds, commodities, ETFs and more. He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.

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  1. Jack Grondin | January 15, 2014

    Hello Shah,
    Thanks for sharing. VERY helpful to me. I have been trying to do this system for the last 3 years but find I'm on a roller coaster with the trading side. I guess it's part of the learning curve. At 62 I don't have a whole lot of time left to build wealth. I enjoyed your last email that came across about being optimistic and positive about making money. I have to keep reminding myself of that. I think as human beings its easy to be negative, the positive you have to fight for. thanks again Jack

  2. Robert in Vancouver | January 18, 2014

    There are some small ETF's on the TSX that pay monthly dividends of 8% to 12% (that's the annual interest rate) and are well diversified. CTF.UN, EIT.UN, FAY.UN, OCV.UN, ENI.UN are some names.

    And there are some small REIT's on the TSX that are profitable, growing, AFFO payouts under 90%, and trading at P/E 's of less than 9.

    For example, SMU.UN is trading at a P/E of 2, paying a dividend of over 8%, and is run by some old pros who built a similar warehouse REIT 20 years ago then sold it for a nice profit, earnings are $3.00/share and annual dividend is only 49 cents per share.

    Triple net REIT's like SMU.UN, MOB.UN, BTB.UN, and TN.UN pass on higher interest rate costs to their tenants by increasing the rent, but they are all locking in 7 to 10 year mortgages at current low rates so higher rates won't affect them anyway.

    Brokers won't tell you about small cap names like these because if you buy these types of ETF's and REIT's you won't need to do much buying and selling anymore.

    And these are all too small for pension funds and other large investment firms to buy so they don't get promoted by analysts or the media (large investors cannot buy anything under a certain market cap no matter how good that stock or ETF is).

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