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"Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it." -Warren Buffett
It's tough to argue with the "Oracle of Omaha." And Buffett is right: Investor "folly" creates some of the biggest moneymaking opportunities you'll find in stocks.
Just look at the whipsaw-trading we've been seeing in recent weeks, with stocks plummeting one day only to soar the next – all because of the bearish or bullish economic statistic du jour.
When we reach the end of this year, I believe that the tech investors who stayed in the market will see that they've been rewarded for their courage, while those who spent 2014 on the sidelines will be penalized for their caution.
That prediction probably won't make it any easier for you to stomach the roller-coaster moves I expect we're going to continue to see in the near term.
But I do believe my trading strategies will help.
You see, knowing how unnerving volatile periods like this one can be, I put together a short list of trading rules that I use during tough stretches like this. They're based on the strategies I use to guide trades in my paid services – the Nova-X and Radical Technology Profits reports – but I've "tightened" them up a bit to better control risk.
And today I want to share those strategies with you.
I sometimes refer to them as my "Sominex Trading Strategies" – a joking reference to the over-the-counter sleep aid. But the fact is that these strategies will help you sleep at night – and not just because they reduce your risk.
Just as important is the fact that they let you sleep better at night while still being invested.
That means you're still making money. And it also means you're not getting left behind.
Because, let's face it: While navigating a risky market can cause some sleeplessness … getting left behind is a nightmare….
Why I'm Not Worried
Before I detail my strategies, I need to tell you why I believe it's worth staying invested.
And to do that, I need to tell you folks a story… about my accountant.
Several times a year, my accountant gives me a lecture, chastising my wife and me for spending too much money dining out. And she may be right on that point.
I always counter my accountant's arguments by reminding her that we're not horrid spendthrifts – and that we're not alone.
Out here in the San Francisco Bay Area, we've got some great, great restaurants. And those eateries aren't hurting for customers.
It's like that in much of the country. In fact, great restaurants are teeming with customers these days.
So while U.S. consumer spending, which powers 70% of the American economy, advanced at a 3.3% annual pace in the fourth quarter – its fastest pace in three years – the strongest spending growth was for food services, in restaurants, bars, and hotels. Consumer outlays there zoomed 10.2%, the fastest growth in more than 20 years.
Consumers only spend on "luxuries" like that when they're confident. And that supports my belief that stocks will rally this year – with tech stocks leading the way.
Tech firms are the big innovators in this country and are the companies creating and pushing the economic trends that will keep America's economic recovery from bogging down.
Here at the Strategic Tech Investor, we're helping you capitalize on that innovation with a tech-investing system that focuses on growth and that spotlights stocks we believe can double in price for you.
For that to happen, however, you need to keep investing – with confidence. And that means we need to help you deal with the turbulence.
With the following three tech-investing strategies, I believe you'll be able to achieve both those goals.
About the Author
Michael A. Robinson is a 35-year Silicon Valley veteran and one of the top technology financial analysts working today. He regularly delivers winning trade recommendations to the Members of his monthly tech investing newsletter, Nova-X Report, and small-cap tech service, Radical Technology Profits. In the past two years alone, his subscribers have seen over 100 double- and triple-digit gains from his recommendations.
As a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs and high-profile industry insiders. In fact, he was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon. And he was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
In addition to being a regular guest and panelist on CNBC and Fox Business Network, Michael is also a Pulitzer Prize-nominated writer and reporter. His first book, "Overdrawn: The Bailout of American Savings" warned people about the coming financial collapse - years before "bailout" became a household word.
You can follow Michael's tech insight and product updates for free with his Strategic Tech Investor newsletter.
very, very good, michael. thank you. you wouldn't also think of some shorting insurance?
Yes, Ian, we have all heard about shorting, but what is it really, and how does one do it?