Start the conversation
Late last month, I wrote to you about the fact that there is no significant statistical relationship between what happens next in the markets and midterm elections.
And what I had to say started a firestorm.
My email exploded, as you might imagine, with the bulk of the commentary centered on the five most dangerous words in the English language – "It'll be different this time."
But, I'm game.
So, let's continue the conversation by playing this through…
It's important stuff, the elections.
More importantly, though, what happens next is on YOUR mind – and that means it's on mine.
As you know, I created Total Wealth with the express intent of sharing everything – the tips, techniques, and tactics – needed to capture huge profits, especially when it comes to trading the headlines shaping our world.
I find scenario analysis works particularly well in situations like this.
Most investors concentrate solely on picking stocks, so they have little, if any, frame of reference for how specific stocks fit into worldly events. Worse, they miss out on some truly tremendous profit potential because they aren't lined up with where the big money is moving.
That's where scenario analysis can help you become significantly more profitable.
Scenario analysis is pretty easy to do if you understand the framework you're dealing with – in this case, that's midterm elections. Contrary to what most people believe, there's NO guesswork involved.
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Instead, you start with empirical data, past performance, and some combination of actual results-driven data. Then, you "walk forward" into the future.
Here's a quick chart that will help you "see" what I mean.
The critical part, for purposes of our discussion today, is the "headline inflection point" I've annotated in red.
That's where the markets can and will shift as headline-driven emotions throw otherwise sound investing logic right out the window. It's also your source of profits.
Out of a dozen or so scenarios I can envision, I see two that are really significant.
Scenario No. 1: A "Blue Wave"
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.