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The markets are continuing to struggle, with all three major indexes only managing tiny spikes and then falling again. "One step forward, two steps back," as the saying goes.
Stocks in almost every sector are under siege. A recovery is on the way, but it's probably going to take longer to get there than anyone wants.
In times like these, the smartest thing to do is play defense.
For a decade, we've had one of the best bull markets in the history of equities, which provided fertile ground for a lot of people to make a lot of money on "high-risk, high reward" moves - growth companies, IPOs, bottom-fishing, and so on.
But that strategy isn't going to work anymore. The best portfolio for the current market is one that focuses on quality, reliable companies with strong fundamentals. High revenues, solid profit margins, good net income available to common shareholders. Economics 101.
Those are the companies that are going to benefit most from the eventual rebound, while firms whose valuation is based on more speculative factors may never get back up to their previous highs.
So, I'll tell you straight up: If you've got positions in that latter, speculative category, it's time to sell. Take whatever profits you can, and rebalance your portfolio for the coming storm.
I've got four picks for you today - two to buy and two to sell - to show you exactly what to look for when you're shifting your holdings around.
Just check out this video...
It's more important than ever for investors to find ways not only to preserve existing capital but position themselves for the best gains when markets recover. As interest rates and volatility rise together, banks are one area where investors are taking refuge.
But we've identified two additional key market sectors where a new flood of buying is going to create opportunities for potentially massive profits, especially in small-cap stocks that often get overlooked by the major players.
I have a strategy to narrow thousands of these stocks down to the few with the biggest potential to be the next market winners.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.