Few investors remember 2007–09 fondly. The ASX 200 lost almost half its value, hitting a low of 3344 points in February 2009.
But not everyone came out of the crisis a loser.
Had you sat out of the market in the lead up to the crash, you were staring at the best opportunity to buy stocks in 30 years.
For the select group of visionaries in this position, 2007–09 was a time of feasting. The average price-to-earnings (P/E) ratio, like the market itself, halved. The Aussie market hadn’t seen anything like it since 1980.
Of course, timing is everything in the markets.
In hindsight, it’s easy to see that 2007–09 was a massive opportunity to invest in stocks. But when fear grips investors, the selling is often brutal, and quick. Panic rarely leads to rational, long-term decision making.
Yet we can’t blame investors. Anticipating what the market will do next is fraught with danger. And trying to pick the top or bottom is an exercise in frustration.
More often than not, you’ll get it spectacularly wrong.
With so many factors to account for, gauging a stock’s true value is challenging at the best of times.
Yet what if you never had to think about what the market would do next?
What if you could generate income from stocks you wanted to own without caring about whether they were overpriced?
And what if you could buy them at a price you wanted to pay?
It’s fine if you are. Like you, most people are completely unaware of this little-known stock-trading technique. But we’re convinced it’s one of the best — and least exploited — income-generating strategies on the market.
Read on for more…
The king of all income-generating strategies
As with dividends, this cash-generating strategy is a way to earn a passive income from big Aussie stocks.
Unlike dividends, however, which companies generally pay out twice a year, this strategy is multi-faceted.
It allows you to extract money from the market within as little as two minutes, anytime you want. And you don’t even have to own the stocks you trade!
In fact, you could make hundreds of dollars from the market ‘on tap’.
But here’s the catch. The strategy also allows you to build stakes in Australia’s biggest companies for a price you’re willing to pay.
Here’s how it works:
First, you select the blue-chip stocks you’d want to own if you were buying. For this strategy to work best, you want to stick with the bigger stocks on the ASX. You should feel comfortable owning shares in these companies in any market — up, down, or sideways.
The trick here is to hone in on the stocks you believe to be overpriced.
Let’s take the example of Commonwealth Bank of Australia [ASX:CBA].
Say you want to buy CBA stock, but you find its $84 price tag too expensive.
No problem. You make a trade using this strategy.
The moment you do, you receive a premium for doing so. These payouts may be $120 or $340, or even more in some cases.
Should the trade go your way, you walk away with the money for basically doing nothing. The only thing is, you wouldn’t own any CBA stock.
Why? Because the brilliance of this strategy is that you’re not in it to buy stocks. You’re in it to collect premiums — dividends on demand, if you will.
Buying CBA, or any stock you like, is your ‘fall back’ in case the trade doesn’t go your way.
But, as far as setbacks go, this is as good as they come.
Should the trade go against you, you’d still keep the payout. But you’d also now own CBA stock for a price you were happy to own it at. That’s because, in order for you to ‘lose’ this trade, the stock price needs to fall. Should that happen, you’d end up buying the stock at the lower price you were happy to pay from the outset. If this isn’t enough, you also get the added benefit of receiving CBA’s dividend payouts.
There are few win-win situations in the market, but this is as close as you’ll get to one.
Normally, when things sound too good to be true, they are. We felt the same way before we saw this strategy in action. Generating cash in the market really is that simple. See for yourself here.
Our colleague, Matt Hibbard, has been using this strategy for 18 months now.
He has a 96.3% success rate.
And though we think this strategy speaks for itself, it would be remiss of us not to mention that Warren Buffett has been using it for decades.
And yet so few people are taking advantage of it.
Do yourself a favour today and discover is perhaps the greatest income-generating strategy in the markets. You’ll never look at income investing the same way again.
Don’t delay. Go here now to learn more.
In this week’s Markets & Money
The hypocrisy of government never ceases to amaze. In response to NAB raising home loan rates by 0.25% last week, Malcolm Turnbull asked the bank for an explanation. ‘If they don’t explain it then NAB customers will go somewhere else and I’d encourage them to do so.’
That’s rich coming from the government.
Where were they when savers had to endure the RBA slashing rates from 7% to 1.5%? Did the government care that savers had a pay cut of 80% over eight short years? Did they ever…
As Vern explained on Monday, borrowers are the only thing the government cares about. That’s because the entire economic growth model is dependent on more debt. We’ve seen global debt rise from US$60 trillion to US$75 trillion since 2009. For every $1 of growth generated, it has taken $4 of debt to create it.
What would happen to so-called ‘growth’ if all borrowing stopped? Vern has the answer. You can find it here.
On Tuesday, Jason analysed gold’s rapid rebound since last week’s pullback. Despite raising interest rates by 0.25%, Fed chair Janet Yellen painted a cautious outlook for the US economy.
Yet inflation is up. The jobs market remains reasonably strong. And US stocks are trading near all-time highs.
Which makes Yellen’s cautiousness difficult to decipher.
Not that gold bugs mind, however.
In fact, they’re rubbing their hands at the prospect of gold prices running higher still. To find out why, click here to read Jason’s analysis.
On Wednesday, Jason turned his attention to the Dow Jones. The Dow continues to retest the lofty 21,000-point level. It’s been tracking sideways for the past 15 days.
For Jason, the consolidation only means one thing: a significant move is coming.
Which way does Jason see the market going? Click here to find out.
On Thursday, Callum took a more holistic approach to the market. As he noted, they go up…and they go down.
The important thing is not to be hasty in drawing long-term conclusions depending on these swings. When markets sell down, as they just did, it can be a good opportunity to look into buying stocks you want to own.
For this reason, you may want to consider giving up on mainstream market reporting. The way news outlets report on markets affects how you perceive them. The negativity in the news is partly why so many investors have sat on the sidelines, even as stock markets have risen to all-time highs.
To close out the week, Vern addressed the recent rumblings in US stocks.
Vern believes the ‘buy the dip’ mantra that’s so popular will become synonymous with ‘putting good money after bad’. That is, spending more money on something that one has already spent money on in the futile hope of fixing the problem.
The US corporate sector has set itself up for a spectacular implosion. In 2008, leveraged loans totalled US$3.5 trillion. Today that figure stands at US$8.1 trillion. For comparison, the subprime debt market prior to 2008 was at US$1.3 trillion…
In other words, any slowdown in the US economy will trigger corporate defaults on an unprecedented scale. For more on this story, click here.
Finally, before we leave you, a reminder to tune into this week’s Financial Anarchists podcast. This week, the team sits down with tech guru Sam Volkering to discuss the massive opportunities you can exploit in this space.
In this week’s episode:
How a bong explains the pot-stocks bubble…
Which shares are getting high off the back of medicinal marijuana…
When you can expect to see driverless cars on Aussie roads…
And much more…
Until next week,
For Markets & Money