Livio Nespoli
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Livio Nespoli

Founder & Chief Executive Officer at InterAnalyst
Mr. Nespoli has been in the investment industry as a broker, registered investment advisor, and financial publisher since 1985. He has authored over 200 financial publications, over 31,000 buy & sell trade charts, and served investors in 35 countries.
Livio Nespoli
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No Personal Opinion Required

When stock prices surge during what feels like an unusually uncertain environment, it’s tempting to proclaim the market is peaking and then bail out. Unfortunately, trading like this can be a money-losing exercise.

Why it’s a mistake to trade on what you “personally” believe is a market top:

It’s incredibly difficult to accurately time the top. Some of the best gains to be had in the market occur during the months before the market tops:

It is vitally important to have a fully automated, unemotional, mechanical system to capture those rising markets and protecting your portfolio from substantial declines . . . as close to the top and mechanically possible.

Most people watch their accounts decline up to 60% using the “Buy, Hold, & Pray” strategy if they have a paid adviser or broker. Another widespread outcome is that they “Panic-sell” because they have nothing but the news to listen to, or maybe a friend, and they act emotionally.  In either case, they are likely paying higher fees than necessary, leaving gains on the table, and getting out too late.

The chart below illustrates this:

When stock prices surge, as they have recently, during what feels like an unusually uncertain environment, it’s tempting to proclaim the market is peaking and then bail out.

Investors aged 50+ pay the price for advisors who just tell them to hang in there. Why? Because sustaining a 50% decline requires 100% gain to get back to even (not including new contributions). In addition, it can take between 5 and 7 years just to get back to even!

Avoiding this at all costs and allowing the InterAnalysts Wealth Preserver Arrows to dictate your entry and exit points is vitally important to remaining in the top 5% of investment performances.

Follow the red and green arrows in the Wealth Preserver. That is all you have to do.