Retail investors are panicked…

Stocks have been in a bear market for months. Both equity and bond markets have been volatile.

A couple of rallies here and there gave investors false hope… they added to their positions only to see markets crash again.

Yahoo Finance reports that an average retail investor portfolio is down 27% since November 2021. Meanwhile, the S&P 500 is down just 11%.

Vanda Research, which tracks retail investor portfolio performance, says:

‘As equities currently sit at similar bear-market-rally peaks, we suspect that retail investors will remain hesitant to raise their risk exposure as they got burned multiple times last year,’ analysts at VandaTrack wrote in a note on Thursday.‘In addition, growing recession risks could become a stronger headwind holding retail animal spirits at bay.’

This sums up everything that’s wrong with mainstream market commentary… and explains retail investors’ underperformance.

First, there’s not going to be a crash yet, as I’ve said multiple times.

The 18.6-year cycle isn’t over, and my readers know that we have several years of growth ahead.

Second, investors that get caught up in the “bear market rallies” didn’t have any understanding of the big picture… whereas my readers were prepared for them and could act accordingly.

A Historical Pattern to Keep in Mind

Historical patterns tell me that years that end in “1” or “2” tend to be down years.

2022 proved my point, and my readers were ready for the underwhelming performance.

More than that, they knew that those historic lows were the best times to buy.

Take a look at this 30-year chart of the Dow Jones Industrial Average. I marked the years ended in “1” and “2.”

Over the past 30 years, years ended in “1” and “2” marked medium-term lows… and turned out to be some of the best years to buy the index…

This is probably one of the most underestimated skills in investing… being ready for the down years and knowing when to buy.

Buying at the top will ruin your performance… while knowing when the bottom of the market is could deliver life-changing returns.

But only if you follow the 18.6-year cycle, and can get into the “right stocks at the right time.”

Fortunately, I can help you do just that.

If you’re interested in learning which stocks and sectors do well in this half of the real estate cycle, you can go right here.

Regards,

Phil Anderson

Editor, Cycles Trading with Phil Anderson

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