Don't Be an Ostrich — Here's Your "Plan C" for Profits

by Andrew Zatlin

The stock market is in trouble!

But not for the reasons you think.

Today, I’ll explain the real reason it’s down.

And then I’ll tell you what to do about it.

For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.

Don’t Be an Ostrich — Here’s Your “Plan C” for Profits

Forget about having a Plan B.

The problems in the stock market have now gone global.

What’s that mean?

It means you’ve got to step up your game to deal with all the zigs and zags.

In other words, it’s time to come up with a Plan C.

The Market’s Down 12% — But Why?

First, some background:

Over the past four months, the stock market has cratered by 12%. But why?

It’s not because companies are under-performing. In fact, about 20% of the companies in the S&P 500 have released their earnings so far, and the news has been positive. Furthermore, expectations are that revenues and earnings will keep growing.

And it’s not because stocks are overpriced. Over the past five years, the average Price-to-Earnings (the P/E ratio) has been 18.6. Last month, it was around 19, right within range.

So what gives?

Simple: Interest Rates

The problem is interest rates! Here’s the situation:

As you know, the U.S. is tightening money policy right now by raising interest rates…

But in Asia, they’re loosening. In other words, interest rates are going down.

That’s why China and Japan have stopped buying U.S. stocks. And that’s why their money isn’t coming into the U.S. right now to prop up our markets!

Bottom line: you need to be prepared for more market dips ahead.

The S&P 500 currently sits at around 4,200.

But I believe it could fall another 5% in the coming weeks and months.

So, how should you play this?

Time for Plan C

There are a few paths you can take:

First, you could “ostrich it” — just hunker down for a year or so and wait out all this volatility.

Second, you could short the market — i.e., bet against it.

Or third, you could buy the dip!

Are you already a “Pro” subscriber? If so, read below for exactly how to make this trade.

In the meantime, Zatlin out. Talk to you soon.



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In it to win it,
Andrew Zatlin
Andrew Zatlin
Moneyball Economics