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"Bulls make money. Bears make money. Pigs get slaughtered."
It's an old saying on Wall Street – one that proved all too true last month.
One of Wall Street's most recent scams took unaware market volatility investors for a fatal ride – one that ended up lining the pockets of Wall Street's richest brokers.
But you don't have to be one of them, and we'll show you how to beat Wall Street with some of the most unreasonably profitable companies on the market…
You see, Wall Street recently peddled investment tools that allowed retail investors to track the inverse performance of the VIX, an index that tracks market volatility.
According to Credit Susie Group (NYSE: CS), these tools were "intended to be trading tools for sophisticated investors" and "may not be suitable for investors who plan to hold them for longer than one day."
However, they became widely popular among retail volatility investors pursuing reliable gains with a low chance of loss.
That all went up in smoke on Feb. 5, when the VIX more than doubled in the course of an hour and sent these inverse funds into free fall.
These two funds, which tracked the inverse performance of the VIX, plunged 80% within an hour of the VIX's spike. In fact, losses were so severe that markets halted trading of both funds in an effort to stem the bleeding.
In the end, though, it didn't matter. By the end of the trading session, both funds had lost a combined $2.6 billion in value, and retail investors were left with the bill.
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Meanwhile, Wall Street took home its brokerage fees and bonuses. In the aftermath of February's rampant volatility, many investors are left with the feeling that the house of Wall Street always wins.
But it doesn't have to…
You see, retail investors don't have to place their faith and funds in complex financial instruments like the XIV to grow their wealth.
Instead, investors can take Money Morning Special Situation Strategist Tim Melvin's advice and keep investing simple.
Rather than focusing on Wall Street gimmicks with no real underlying value, investors can place their money in real companies that "are consistently profitable, simple to understand and manage, with excellent management willing to stay in place."
Let take a closer look at Tim's strategy – and his favorite stock to keep your investments safe from Wall Street scams…
Avoid Market Volatility by Ditching Wall Street's Favorite Stocks
It may feel counterintuitive, but looking for undervalued stocks in places that Wall Street is ignoring is one of the best ways to set your portfolio up for profit.
You see, Wall Street hedge funds and investment firms have the kind of capital that allows them to buy companies with tremendously large market caps in the area of hundreds of billions of dollars.
Because of their wealth, large Wall Street firms often ignore small companies that have huge profit potential but just aren't liquid enough for the Wall Street giants to waste their time with.
This leads to many small companies with great balance sheets getting overlooked by the market – a perfect buying opportunity for retail investors, who don't have billions of dollars to throw around.
These are companies that have the kind of growth potential to maintain value no matter what's happening in the markets. They're true value stocks at bargain prices.
And Tim has found a company that fits the bill perfectly – it's the kind of stock that will make sure you'll never have to worry about market volatility ever again and will cost you a lot less than Wall Street's next scam.
Here's Tim's favorite pick…