Here we go! All previous tips lead up to this.
Here is one of my favorite quotes from Phil Town.
“If the stock goes up, we make money but if the stock goes down, we get rich.”
If you want to make big returns in the stock market, Stockpiling is your solution.
Here is how you stockpile:
Step 1) Send money to your broker
As taught in the onboarding education, we recommend investing between 15% and 30% of your monthly income. In this case, you should send between 15% and 30% to your broker every month.
Step 2) DCA (Dollar Cost Average) 50%
Let’s say you send $500 to your broker every month. In this case, you should DCA $250 into stocks you currently hold or buy new stocks. Don’t sit on the sidelines. You should keep investing. You need to leverage the power of compound interest.
Step 3) Stockpile 50%
The other $250 should be saved for stockpiling. What this means is you should wait for the market to drop and when it does, try to buy shares of stocks you currently hold or buy new stocks. When you buy On Sale stocks with a high 4M score, especially when the market is down, these stocks have a high probability of taking off like a rocket when the market goes up. That’s where you make the BIG RETURNS!
Examples:
- During the Great Recession of 2008, the market went down by 38%. In 2009 the market went up by 24%. If you had bought On Sale stocks in 2008, you could have made over 100% returns that year with a few On Sale stocks.
- During the Covid dip of 2020 (February and Market of 2020), the market went down by 30%. In 2020 the market went up by 16%. If you had bought On Sale stocks during the Covid dip, you could have made over 100% returns that year with a few On Sale stocks. That year, my portfolio was up 120%.
Pullbacks in the market don’t happen often. You should be prepared with cash on hand to buy On Sale stocks as they drop. Taking advantage of opportunities like this can pay off big time.
Note: The returns listed above are not a guarantee of future performance.