The sad truth about investing in stocks

It is a fact that most retail investors do not make any money with stocks.

Estimates are 80% (!) – a breathtaking number. Retail investors often show a pro-cyclical behavior and engage with “hot topics” too often where the upside is modest and risks are underestimated. 

Further, it is shocking to hear even 90% of fund and money managers, i.e. highly paid professionals, to not be able to keep pace with the broader markets. A big reason are costs, but also wrong stocks.

Don’t they tell us that stocks always go up?

Sure, they do. But only in the long run.

I mean really long.

Not sure everyone will sit by for 15 years and sleep well at night. 

It is proven by history that there are periods where nothing happens. 

Did you know there have been several periods of many years and even more than a decade until those broader markets reached their former highs again?

I am only talking in nominal terms – not adjusted for inflation.

You can be a millionaire. But if a cup of coffee costs half a million, your status won’t give you much.

Here’s an important chart from my presentation you should have seen.

The reason for such prolonged periods with basically no returns are sector rotations.

Different sectors have different weightings in an index over time.

Sometimes it’s energy that leads the pack, sometimes financials. 

At other times, like currently, it can be tech.

Every time there have been exaggerations like we have now, meaning any sector gaining too much weight in an index, markets at the minimum went sideways for many years.

There are cycles and market dynamics.

Historically, it was not a good idea to

  • invest only in the biggest companies as they lost their top spots – or where is IBM, the famous “Big Blue” and once the world’s biggest company? Or AT&T?
  • bet on broader markets when their direction was heavily influenced by a few, richly valued stocks and sectors

One could argue that dividends are a remedy.

While in lousy market environments they can be the only source of returns, it is also key to know one thing: dividends are not safe.

A highly indebted company will always seek to repay debt and shore up its balance sheet first when times are hard. That’s why many companies are cutting their dividends in this market environment.

Forget these “dividend aristocrats” and “kings” – they also have already cut and will do so.

Wouldn’t it be clever to not follow the herd and instead find a way to not only keep pace with the market, but even to beat the market?

That’s what my stock ideas do.

I can prove it to you.

per 11 October 2023 market close

Don’t take just my words.

See what some of my members say about my work:

Since I started this blog and my memberships, the results have clearly proven that it is possible to beat the market.

The best thing about it: I am not chasing any hot stuff, betting on binary outcomes like in a casino or picking risky pre-revenue junior miners that maybe never start to produce anything. 

My secret formula is: Keep it simple.

I am not kidding. 

By saying almost always "no", especially where others blindly follow, by using common sense, questioning mainstream narratives and by doing clean fundamental analysis to check the numbers, I manage to find here and there a stock idea where the odds are in my favor.

My members receive these ideas exclusively. 

Low risk, high return. Others call it "high optionality".

As a fact, if you have a portfolio of such stocks, statistically the odds are clearly in your favor.

Not when you have lots of Big Tech together with over-indebted legacy companies.

Because you are receiving my newsletters and reading my Weeklies, I assume you're interested in stocks. This way, you are already a step ahead of the crowd, because you likely also have different views on certain topics. 

So, why don't you go to the next level?

If you stay where you are, you won't change anything for the better. That's for sure. 

My offer to you also has a low-risk and high-return component for you, personally.

My service comes with a full, no-questions asked 14 day guarantee. If you really don’t like my reports, for whatever reason (but you need good ones – for you, not me), you get fully refunded.

In a nutshell: Your personal limited downside, massive upside case:

  • worst case: you join, grab some of my best stock ideas for free, quit and get refunded
  • best case: you will love my reports and market-beating ideas I frequently bring to light and be exited to get your hands on the next issue

per 11 October 2023 market close

per 11 October 2023 market close

If you wait and do nothing – well, nothing will happen.

But one thing is for sure: There are always stocks that go up and beat the market – even if the market goes sideways.

It is up to you.

All the best,

Alan

Founder of Financial Engineering