Dear Reader,

Before we get into today’s newsletter…

I want to let you know I’m holding a FREE live Portfolio Accelerator Masterclass happening tomorrow Thursday, October 1st at 7:00 P.M. Eastern.

During my free Portfolio Accelerator Masterclass I’ll walk you through:

• Details on a strategy that has allowed me to leverage chaotic events to accelerate my overall portfolio returns (In fact, I've personally used it to achieve an exceptional 39.15% compound annual growth rate every year for the last 5 years).
  ​
• How you can use this strategy to take home even BIGGER returns on individual trades (though they are the exception NOT the rule, I've used this strategy on higher risk trades to take home gains as high as 729%, 1,068%, and even 1,354% in less than 9 months).
  ​
• And how to use this strategy to profit from major geopolitical events (including the one that's happening as we speak).

​SAVE YOUR SPOT FOR THE FREE PORTFOLIO ACCELERATOR MASTERCLASS HERE​

Again, attendance is free but spots are limited.

Now, let’s get back to today’s edition.

It feels risky to invest when the stock market is sitting near all-time highs.

In fact, in times like these…

Selling can feel like the smart move.

Get out at the high…

Take your profits…

Wait for the inevitable correction – or even bear market…

Then buy back in at a better price.

Sounds sensible, right?

But as I’ll show you in today’s newsletter…

That’s actually one of the highest-probability ways to LOSE money in the stock market.

And there’s nearly 100 years of data showing why. Because:

Bull Markets Usually Run Further Than You Think

Going back to 1928, there have been 28 bull markets in the U.S.

Now keep in mind that, for this exercise, I’m using the traditional definition:

A bull market is a gain of at least 20% without a 20% reversal.

Once stocks fall 20%, the bull market ends and a bear market begins.

Using that definition, the average bull market has produced a gain of about 163%...

And lasted nearly three years.

Now compare that with bear markets.

There have been 27 of those over the same period.

So almost exactly the same number.

But the average bear market lasted just eight months…

With stocks falling 33% on average.

The difference between the two means that if you spend your investing life constantly trying to avoid the next bear market…

You can easily give up far more money by missing the bull market that came before it.

As the legendary investor Peter Lynch once said:

“Far more money has been lost by investors preparing for corrections…than has been lost in corrections themselves.”

But There’s One Important Caveat

Everything I’m talking about today applies to the broad U.S. stock market – NOT individual stocks.

There is a huge difference.

A single company can hit an all-time high, collapse 80%, go bankrupt, and never recover.

The graveyard of history is littered with them.

Over time, many of those companies grow their earnings through investment, innovation, and productivity.

The weaker ones shrink or eventually fall out of the index.

And because stocks are ultimately claims on company profits…

As the economy grows and businesses earn more over time, stock prices tend to rise too.

That doesn’t mean stocks go higher every year. They clearly don’t.

But over 10, 20, or 30 years, buying the broad U.S. market is essentially a bet that corporate America will earn more in the future than it does today.

Historically, that’s been a pretty good bet.

For instance, despite all the market doom-and-gloom in the media…

Earnings growth has actually been accelerating.

But even once you understand that upward bias…

You may still find this next statistic surprising. Because:

All-Time Highs Have Actually Been a GOOD Time to Invest

Most people instinctively treat an all-time high as a warning.

Stocks have already gone up.

So surely they’re due to come back down, right?

Except historical returns tell us something very different.

Vanguard looked at U.S. stock returns going back to 1950 and compared what happened after investing on an all-time-high day versus every other day.

The counterintuitive finding?

One year after an all-time high, the market returned an average of 9.5%, versus 9.2% after other days.

Over three years, it was 30.2% versus 28.5%.

Over five years, 55.8% versus 51.9%.

Now, over 10- and 20-year periods, that advantage actually flips the other way.

So I’m not saying all-time highs are somehow the best possible long-term entry point.

The point is much simpler:

An all-time high by itself is not a good reason to sell – or sit on the sidelines waiting for a crash.

If you think about how bull markets actually work, that makes perfect sense.

A bull market doesn’t hit one all-time high and stop there.

It can hit a new record…

Then keep climbing for months or years afterward.

So an all-time high by itself isn’t evidence that stocks have gone too far.

Making new highs is what a bull market DOES.

And this is why…

Trying to Time the Market Can Become Such a Dangerous Game

Let’s say you sell today because stocks look expensive.

Then they rise another 15%.

Now you don’t want to buy back in – because you’d be admitting you sold too early.

So you wait for the correction.

Eventually stocks fall 10%.

But they’re still above the price where you originally sold.

So you wait some more.

Now you don’t just need a correction.

You need a bigger correction.

And the further stocks rise without you, the bigger the crash you need before buying back in feels justified.

I’ve seen people get trapped in this mentality for years.

They start out waiting for a pullback.

Before long, they’re practically waiting for 1929.

And there’s another problem.

Even if you correctly predict the next bear market…

You still have to get back in.

Think about what that actually requires.

Stocks are down 25%.

The headlines are terrible.

Everyone is debating whether there’s another 20% to go.

Maybe unemployment is rising.

Maybe there’s a recession.

And now, after selling because you were worried when everything looked “too good to be true”...

You have to suddenly become brave enough to buy while everything looks terrible.

That’s much harder in real life than it sounds on paper.

That’s why I always tell people to:

Stop Trading Your Long-Term Portfolio

For my long-term portfolio, I’m not trying to predict every 10% correction.

I’m not going all to cash because stocks hit a record.

And I’m definitely not betting my financial future on my ability to nail both the top and the bottom of the next bear market.

That money has a different job.

I want it participating in the long-term growth of the market and compounding for years.

Dollar-cost averaging works.

If I have a large amount of cash ready to invest, lump-sum investing can work too.

What I don’t want to do…

Is constantly interrupt that process because I have an opinion about what stocks might do next month.

As the late Charlie Munger once said…

“The first rule of compounding is to never interrupt it unnecessarily”

Now, that doesn’t mean I’m against active trading.

In fact, I’m all for it.

I just think people need to understand the difference between long-term investing and trading.

My long-term portfolio is designed to keep compounding over the long term.

I keep separate capital for active opportunities where I think I can generate returns higher than what the broad market gives me.

That distinction has served me extremely well.

Over the past five years, I’ve managed to generate nearly 40% annualized returns by combining long-term investing with the active strategies I use on the side.

Some of those trading profits can fund your lifestyle.

They can also be fed straight back into your long-term investments, giving you even more capital to compound over time.

And again…

That’s exactly what I’m going to show you LIVE tomorrow at 7:00 P.M. Eastern during my free Portfolio Accelerator Masterclass.