Hi Guys, You are getting this email because you are a paid up member to my Fearless Wealth Research Service AND this is your May 2017 Research update. High Level: Part I. The S&P500 is in Green Light Mode or High Probability Mode (NYSE: IVV) Part II. Where is money flowing? - LOCATION: Money is flowing to Emerging Markets (NYSE: EEM). - SIZE: Money is flowing to small-cap stocks (NYSE: IJR). - TYPE: Money is flowing to technology stocks (NYSE: XLK) Part III. Reminder: Why price charts? Part IV. The Two Questions Part V. Gold review because we are in a Contraction Cycle Part VI. Are you stuck? --- --- --- Everything you need to know about where to be invested in the stock market can be answered with the two questions. Your money doesn t need stories about the next Facebook of China, or option trading strategies, or day-trading strategies, or FX trading systems, or you get the idea. AND of course, your money doesn t need any conversations about secret meetings with important people in back rooms at fancy hotels All your money needs is to get two questions answered the right way and then your money will love you by inviting other people s money into your account. Get these two questions right and you ll get everything right. There are two questions I ask myself each day, week, month, quarter and year to understand exactly where to place my money to have it grow consistently and reliably. The answers to these questions determine EVERYTHING that happens to your money in the stock market regardless of age, self-described risk tolerance or income. ------------------------------------------------------------------------------------------------------ III. A REMINDER: WHY PRICE CHARTS? Why images RC and not stories or information or secret meetings or trading or?
Because price charts (at least the way I use them) can digest the 100 s of millions of opinions and views of people who invest, advise, guide, blog, hype, hedge, etc. into one ruthlessly simple picture. For example: You re driving 45 miles an hour on a mountain road, you ve been here before but still it s a mountain road. Question for you, what happens to you when you read the following information (below) driving at 45 mph on a mountain road? Answer: Can you even read it going 45? Some could but most likely what happens is confusion, worry and possible overwhelm. Now, what if the same scenario was happening as above but you saw the picture below driving at the same 45mph?
Answer: The image above would probably have you go, I got it, there might be falling rocks and your brain would be able to digest the information immediately (keep driving but be aware). We are going to do the same thing with your stock market money. Meaning, we are going to read the sign(s). Read this until you believe it. The right image (price chart) can cut through the noise, the hype, the confusion, the doubt and the stories in moments and leave you with an immediate I know what to do and I ll be okay. That is what I fight for most with your money. Clarity on what actually matters. ------------------------------------------------------------------------------------------------------ IV. THE TWO QUESTIONS The questions below are the most powerful questions you can ask yourself. These two questions are about the market and not you. That is important. Remember, IF you ask the right questions THEN you can make sure you are never hurt badly again AND you can make sure you never miss out on the next major move higher. What are the two questions? #1) Should I be IN/OUT of the stock market? And then based on the answer to question one, ask question two. #2) Where is the money flowing? The follow-up questions for question two are, what is the best LOCATION, SIZE AND TYPE of investment. #1) Should we be IN/OUT of the stock market? The Market Probability Strategy answers the first question. And it s this answer that carries with it 95% of getting everything right or wrong with your stock market money. The rest of the questions simply help you safely accelerate your money while IN the market. The answer to this first question is YES. The S&P500 is in what I call, high-probability mode, or GREEN mode. GREEN mode tells us the market is the best place to safely accelerate money.
The market has been in a stable uptrend (GREEN Mode) for 13 months and counting. The market went into GREEN mode in April of 2016 and it is still solidly in GREEN. The image below is the S&P500 in GREEN MODE. One of the least expensive ways to simply buy the S&P500 is with Schwab. #2) Where is money Flowing (LOCATION)? The best location for stocks can be US Domestic, International-Developed, International- Emerging, World Ex-USA and World. For the past seven years, the best LOCATION has been US Domestic. BUT things are changing. Almost every international location is beating US Domestic. And the one that is beating them all is Emerging Markets (NYSE:EEM). As you can see in the image below there is still one more hurdle. That one hurdle is for the Emerging Markets/US Domestic price chart (the one below) to break above its November 2016 high. This is your signal to start an international allocation. This will be the first one in a very long time.
#3) What is the best SIZE for stocks? The best SIZE stock is small-cap stocks. They are beating every other sized stock. The different sized stocks are Mega, Large, Mid-cap and Small-cap. And for the past eight years, small-cap stocks have reliably and consistently grown people s money better than any other sized stock. As you can see in the relative price chart below. It s comparing small-cap stocks against the S&P500 since 2008. If the line is moving higher than small-cap is beating large-cap stocks. AND as you can see small-caps do not beat the S&P500 every day or week but over time they are still beating it.
#4) What is the best TYPE symbol? This question doesn t just look at stocks, it looks at stocks, bonds and commodities and asks Out of all the different TYPE of symbols or sectors which ones are growing people s money most reliably and consistently? The answer is Technology (NYSE: XLK). Below is the relative price chart comparing technology stocks to the S&P500. As you can see technology has been a leader for years.
------------------------------------------------------------------------------------------------------ Part V. GOLD: BECAUSE WE ARE IN CONTRACTION CYCLE Because the Investment World is in a Contraction Cycle we look at Precious Metals through a separate lens. Below is a price chart of Gold. Not a tracking symbol of gold but the actual price of gold the metal. The rule is IF the 70-day exponential moving average (EMA) is above the 161-EMA then gold is in GREEN LIGHT MODE. IF the 70-EMA is below the 161-EMA we are in RED LIGHT MODE. As you can see below we are in GREEN MODE with gold AND you should be cautious because the overall picture for gold is one of sideways-ness. So, if the picture below looks confusing, it s because it is confusing. And that is why we are being patient. So be patient AND cautious with gold.
Why do I provide so much extra information on gold? Because gold, for some reason, is where people seem to want to back up the truck every time they hear something good about it. Keep your emotions in check. Gold Choices My favorite way to own both metals is Central Funds of Canada Company (NYSEMKT: CEF). My favorite way of holding the general precious metal mining index is Market Vectors Gold Miners ETF (NYSEARCA: GDX). My favorite way of holding the small-cap miners is with Market Vectors Junior Gold Miners ETF (NYSEARCA: GDXJ). My favorite way of holding silver miners only is Global X Silver Miners ETF (NYSE:SIL). My favorite way to have exposure to precious metals via an individual stock with the least amount of volatility is Franco Nevada Corp (NYSE: FNV), which is a royalty trust company. My favorite way to own gold and have a large dividend yield also flowing into my investment account is Gabelli Global Gold Natural Resources And Income Trust (AMEX: GGN). MORE Gold Choices:
Silver beats gold in a bull market: The Metal Silver (NYSEARCA: SLV) The Metal Gold (NYSEARCA: GLD) Small-cap beats large-cap in a bull market: Small-cap mining ETF of the index (NYSEARCA: GDXJ) Large-cap mining ETF of the index (NYSEARCA: GDX) Silver mining beats gold mining in a bull market: Silver mining ETF (NYSE:SIL) Gold mining ETF (NYSEARCA: GDX) Small-cap silver mining beats small-cap gold mining: Silver small-cap mining = (NYSE: SILJ) Gold small-cap mining = (NYSEARCA: GDXJ) Leveraged silver beats leveraged gold in a bull market: 2X Leveraged Silver ETF (NYSEARCA: AGQ) 2X Leveraged Gold ETF (NYSEARCA: DGP) 3X Leveraged Gold ETF (NASDAQ:UGLD) 3X Leveraged Silver ETF (NASDAQ: USLV) Leveraged small-cap beats leveraged large-cap mining: 3X Leverage small-cap mining ETF (NYSEARCA: JNUG) 3X Leveraged large-cap mining ETF (NYSEARCA: NUGT) Everything that is not gold but lives in the precious metal world is a leveraged position to gold. So, for example Silver is 1.5X more leveraged than gold. So, if you are going to buy gold know that silver will move up and down 1.5X faster. See the below leveraged ways to play gold. The numbers below represent the idea of how much more they are leveraged than gold and not an exact mathematical number that will always keep the leverage. The point is to show you how leveraged you are in these other gold-like positions. All leveraged numbers below are based on when gold is in a strong uptrend (like when gold moved from $1050 (December 2015) to $1375 (August 2016). 1X = Gold the metal 2X = Silver the metal
2X = 200% of gold s move 3X = 300% of gold s move 4X = 200% of silver s move 5X = Large-cap precious metal mining shares 6X = 300% of silver s move 10X = Small-cap precious metal mining shares 12X = Silver mining shares (SIL) 17X = Small-cap silver mining shares (SILJ) 35X = 300% of large-cap precious metal mining shares move 50X = 300% of small-cap mining shares move BOTTOM LINE WITH GOLD: It is still in a I don t know what to do pattern so tip-toe into it if you are going to go in right now. This is NOT a back-up-the-truck moment. ------------------------------------------------------------------------------------------------------ Are You Feeling Stuck? If you find yourself stuck or scared to make the wrong decision, then we can help. Your next step is simple. All you have to do is call Patty, 650.257.0207 and say you d like a Strategy Review with RC. This is a one-on-one conversation where we look over your money and investment behavior and get you on the path of action. We find that one thing that can help you fill the gap between where you are right now and where you want to be. Sometimes that action is through your new clarity and knowing what to do next and sometimes that action is through asking me to mentor and coach you so you can get back in control of this part of your life. And whether you think of the Strategy Session as a second opinion or simply being able to have an honest conversation about your behavior around your money you ll come away with clarity and specific next steps. Thank you for being in my world. In Your Corner, RC Peck, CFP