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Like millions of people around the world, I woke up to news that a U.S. airstrike had taken out Iranian Major General Qassem Soleimani last Friday.
My thoughts immediately turned to your money.
The world's financial markets have been relatively calm in the days since, but I don't expect that to remain the situation for long.
Iran will strike back.
The only question is whether or not YOU and your money will be ready.
Here are three critical moves you need to make right now…
There's a lot of mental energy being wasted at the moment with regard to whether the strike was justified. Chances are you have an opinion on the matter just like I do.
What matters right now is what you need to do to protect your money when Iran retaliates, not if.
The first step is very clear and, thankfully, very simple.
Step No. 1: Buy an Inverse Fund
Studies show that specialized inverse funds like the two I recommend – the Rydex Inverse S&P 500 Strategy Fund (RYURX) and its exchange-traded fund equivalent, the ProShares Short S&P 500 (SH) – can take the sting out of a major market drop. That's because they appreciate as the S&P 500 falls.
You don't want to go crazy and put everything you own into 'em, though.
Inverse funds are one-trick ponies, meaning that you'll lose money if the S&P 500 continues to appreciate and there is – hopefully – no attack. However, they're truly inverse as the name implies, so they zig when everything else zags (which means they've got a lot more to offer you than Wall Street's usual thinking on diversification).
The key with an investment choice like these is to buy shares that are worth approximately 1% to 3% of your overall investable assets because what you're looking to do is a) take the sting out of a market drop and b) dampen overall portfolio volatility.
Step No. 2: Know Which Stocks You'll Keep and Which You'll Abandon
Not many people understand this, but I guarantee you savvy investors do.
The key to big profits is continually harvesting your winners and periodically pruning your losers, or at least companies that no longer light your jets.
It's up to you to decide which stocks you want to keep and which stocks you need to eject if the you-know-what hits the fan – a situation euphemistically known as SHTF, which stands for something I can't print here… even if they're not currently in the red, and even if you hold onto them for just a little bit longer.
Everybody's got 'em… perhaps you bought something that's run up or you inherited company shares from a loved family member. Either way, they no longer fit your investment objectives or match up to the reasons why you bought in the first place.
Those are a great place to start selling … now, before the you-know-what hits the fan, and you can't.
The other way to tackle this is to take a good look at your portfolio and figure out which shares match up the Six Unstoppable Trends and which don't. Keep the former, and start harvesting the latter.
Again, as in sooner rather than later, while you can sell into the strength that's there now.
Many investors forget that the NYSE was closed for three days following 9/11. I think it's highly likely that Iran will target our financial markets in such a way as to disrupt the flow of capital, or at least try.
Step No. 3: Create a "Buy" List
About the Author
Keith Fitz-Gerald has been the Chief Investment Strategist for the Money Morning team since 2007. He's a seasoned market analyst with decades of experience, and a highly accurate track record. Keith regularly travels the world in search of investment opportunities others don't yet see or understand. In addition to heading The Money Map Report, Keith runs High Velocity Profits, which aims to get in, target gains, and get out clean, and he's also the founding editor of Straight Line Profits, a service devoted to revealing the "dark side" of Wall Street... In his weekly Total Wealth, Keith has broken down his 30-plus years of success into three parts: Trends, Risk Assessment, and Tactics – meaning the exact techniques for making money. Sign up is free at totalwealthresearch.com.