Your goal as an investor is simple… to make money.
What’s the easiest way to do that? It’s become an old cliché… “Buy low and sell high.”
You see, lows can always go on to make even lower lows. And new highs can lead to even higher highs.
Your best chance to make major profits is to wait for the uptrend before buying. You want to take opportunities to “buy high and sell higher.”
That’s the opportunity we have in U.S. stocks right now. The market started 2019 off with a bang. The Dow Jones Industrial Average is up 9% so far this year.
Even more, the index rose for nine straight weeks… something that hasn’t happened since 1995.
So does that mean you’ve already missed it? Does that mean you should sell now if you’re up on U.S. stocks?
Not at all. History says we should see better-than-normal performance from stocks going forward. And double-digit gains are likely from here.
Let me explain…
Buying after a major rally is counterintuitive. It feels uncomfortable, even dangerous. But history says that your “gut feeling” on this is dead wrong.
We want to buy after a rally has started. It means the trend is in our favor. And history shows that more gains are likely when that’s the case.
Again, the Dow recently went up for nine straight weeks. We’ve only seen similar rallies eight other times since 1949.
That’s roughly one opportunity every nine years. And six out of those eight previous occurrences led to profits over the year that followed.
You can see the recent rally in the chart below. Take a look…
Stocks surged higher after bottoming on Christmas Eve. They jumped for nine straight weeks.
Surprisingly, history says this rally still has plenty of upside potential. Similar multiweek rallies have led to major outperformance over the next year. Check it out…
Since 1949, owning U.S. stocks returned a little more than 7% a year. But buying after several straight weeks of gains tended to lead to better returns.
Similar multiweek rallies typically returned 4% gains in three months, 7% gains in six months, and solid 11% gains over the next year.
These aren’t blockbuster returns… But they’re solid outperformance. And they tell us the recent rally is likely just the beginning. We should expect more gains throughout 2019.
As you know, we’re predicting a spectacular Melt Up in the months ahead as investors flood back into stocks. While tech and biotech stocks should soar the most, this nine-day run shows even the “fuddy duddy” stocks of the Dow are likely to outperform.
So if you are still standing on the sidelines, it’s time to get into U.S. stocks. Double-digit gains are possible from here.
Source: Daily Wealth