There’s only one place left to get consistant triple digit returns in this market.
It’s a segment of the stock market that’s just now starting to wake up. This segment always runs hot during the final innings of a bull market – when investors’ desire to speculate is at its peak.
Oh sure, the stock market has had a blistering run higher.
The broad market averages are trading near their highest valuations ever. Investor sentiment, a contrary indicator, is wildly bullish. There are all sorts of technical “caution” signs.
And, I think we’re well overdue for some sort of a shake out. But, if you time it right, the gains can be explosive…
I’m talking about low-priced stocks.
To be clear, these aren’t “penny stocks” – those fly-by-night symbols pitched by boiler room operations. These are valid companies with actual revenue and earnings that have been overlooked by Wall Street because their share prices are too low.
But, in the final stages of a bull market, when larger capitalization companies are richly priced, and everybody already owns the obvious names (like Microsoft, Google, Intel, etc.), smart investors start to look in the low-priced arena.
And, if just a little bit of money flows into that segment, it can have a huge impact.
Free Trading Resources
Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career – at zero cost to you. Just click here to check it out.
Just imagine what could happen if $20 trillion hits that market. Well, that’s how much money has come into the stock market over the past year. When it starts to rotate out of the large-cap segment and into the low-priced… Look out. It’ll be a stampede.
We’ve already seen nearly 3,000 low-priced stocks soar more than 100% over the past year. And, the rotation really hasn’t even started yet.
But, it’s about to…
We’re heading into a seasonally weak period for the stock market. It’s the whole “sell in May and go away” story we hear every year.
This year, with the S&P 500 trading near its highest valuation ever and with the technical conditions stretched so far into overbought territory, it seems reasonable to expect some sort of weakness in the broad stock market.
And, when that money comes out of the large-cap names that have performed so well over the past year, it has to find a home somewhere else. I bet that money is going to look for bargains in the low-priced segment.
Traders should consider moving money into that segment before the stampede gets started.
Best regards and good trading,
P.S. I think these low-priced stocks will surprise a lot of people in the coming months… And, I have good reason to think so.
A few years back, I started testing a trading system that targets these low-priced names. And once I started sharing this simple strategy with my subscribers, they were able to book gains like 131% in a couple weeks, 158% in a month and a half, and even 148% in just over two months.
That’s why, on Wednesday, April 28, I’m putting on an exclusive presentation about this system. And to prove to you how well the system works, I’ll be giving away 3 free trade ideas during the event. I hope to see you there.
In today’s mailbag, Jeff Clark Trader member Ronald shares how he started trading thanks to Jeff…
Jeff, I just want you to know that you convinced me to trade options. I’ve never done it before so, at the age of 78, here we go. I’ve read all your literature about options, and even opened an account with TD Ameritrade, as you advised. Your approach makes sense, so I’ll follow your advice in this endeavor. Happy investing.
And, Jeff Clark Trader member William shares his experience with limit orders based on Jeff’s recent essay…
You’re so right about limit orders. I had a couple of orders that were going to expire, and I was going to have to buy the shares. So, I changed it from a limit that I wasn’t going to get, to a market order.
I looked before I entered the market order, and they were selling for 2.05, and when mine sold they were priced at 1.64 in about eight minutes. So even if you must sell below the desired price, just change it to the market price now and put a limit on it at a few cents below the last quote.
Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming – and send us any questions – at [email protected].