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As dry as they may be, let's go over some numbers.
First, on Oct. 23, the S&P 500 broke the record for the number of consecutive days without a 3% decline. The previous record was set back in 1996, when the S&P 500 went 241 days without a meaningful decline.
Second, since Jan. 1, the S&P 500 has closed at a record high 66 times – the most since the mid-1990s.
Third, so far this year, the S&P 500 has dropped by 1% or more in a single day only four times. That's its longest stretch we've seen since 1964.
Sounds great – if a bit boring (volatility is also at record lows).
However, there is a huge problem with this generational bull market. It makes me nuts that many investors – too many of you folks reading this – are sitting on the sidelines.
It's bonkers. I don't get it.
While it sounds counterintuitive, many investors stay out of record markets because they fear the good times could come to an end any day now.
I know this describes many of you folks because you write and tell me that you're afraid of this "peaky" market.
Fear no longer.
Here's the thing. If you've got the right "toolkit," you can stay in any sort of market – a high one poised for a dip, a low one about to soar, or anything in between – and make money.
A lot of money.
Here's what you need for that toolkit…
The Case for Stocks – Even at the Top
Tech investors who stay in the market will be rewarded for their courage.
According to Dow Theory Forecasts, "the biggest risk of investing is not being in the market when it goes down, but being OUT of the market when it goes up… Every time you pull money out of the market, you run the risk of missing those important rallies that create seven-figure portfolios."
In other words, the best time to get out of the market is never.
Now, before we fill up our toolkit, let me clear up one major item.
I don't see any signs of an impending correction. But if we get one, it would present us with lots of great buying opportunities.
And the best way to seize the advantage with such a turn of events is to make sure you are in the market along the way.
Our job here at Strategic Tech Investor is to make money no matter what happens. To do so, you'll want to put these Five Market Top Tools in your kit. They're designed to make money from this great bull market – and bear markets as well.
Take a look…
Market Top Tool No. 1: Buy Test Shares
This is actually two powerful Market Top Tools in one simple move. When a market is at a record and there's a risk of a sell-off, rather than make your normal entry in a position, you start with just a few "test shares."
By doing so, you greatly reduce your risk and determine if the timing is right for this play. What we want to do is make sure we're set for any sudden rally – and at the same time reduce our risk of losses.
Here's how it works. Let's say your standard market order for a stock is $2,500. Instead, you would cut that to as little as $500. That way if either the stock or the market retreats quickly, your portfolio won't suffer much damage.
But at the same time, if the stock starts to move quickly, you can always add to your position over time.
Market Top Tool No. 2: Use Stop-Losses
There are two ways to employ this essential Market Top Tool.
The first is a stop-loss that protects against losses getting too deep on a new entry. I suggest a stop-loss of no more than 20%. This is a classic tool designed to avoid suffering any catastrophic setbacks. I always set my stops on what's known as a "good until canceled" basis, which is industry parlance for having one in place for 60 days.
The second method is a "trailing stop" used to protect gains. This is one that moves up as the price of the stock advances. Use the same 20% figure in this manner.
Let's say you bought a stock at $15 that's gone up by 66% to $25. A 20% trailing stop gives you a price of $20. That way you get out with profits of 33% – no matter what happens.
Market Top Tool No. 3: The Cowboy Split
I'm shocked more professional investors don't know about this powerful moneymaking tool. But it's a Market Top Tool my paid-up Nova-X Report and Radical Technology Profits readers have been using to rack up triple-digit gains like clockwork.
Simply stated, the cowboy split is a staggered entry system. You take a position in a stock at market – and then enter a "lowball limit" order to buy more if a discount comes your way.
In general, I recommend employing a 15% to 20% discount from your entry price as a second buy point. Here's how it works…
About the Author
Michael A. Robinson is one of the top financial analysts working today. His book "Overdrawn: The Bailout of American Savings" was a prescient look at the anatomy of the nation's S&L crisis, long before the word "bailout" became part of our daily lexicon. He's a Pulitzer Prize-nominated writer and reporter, lauded by the Columbia Journalism Review for his aggressive style. His 30-year track record as a leading tech analyst has garnered him rave reviews, too. Today he is the editor of the monthly tech investing newsletter Nova-X Report as well as Radical Technology Profits, where he covers truly radical technologies – ones that have the power to sweep across the globe and change the very fabric of our lives – and profit opportunities they give rise to. He also explores "what's next" in the tech investing world at Strategic Tech Investor.