On Monday, the markets collapsed over 700 points as the trade war began to look more and more like a currency war in the making.
The U.S. declared China a currency manipulator after that nation allowed its currency to decline sharply.
I view it as fairly unlikely that China cares what we think at this point in the game.
It’s clear that the top officials in that nation believe they can win the trade war.
This could get uglier if neither side blinks sometime soon.
So naturally, we should panic and begin selling stocks short, or rearrange our portfolios and make all sorts of short-term decisions and adjustments.
Maybe we’ll buy some puts in case the world ends tomorrow, or sell all our banks right away because more interest rate cuts would mean the end of the world.
We should probably check our stock prices a lot and set trailing stops to lock in smaller losses just in case this all goes over the cliff in a proverbial handbasket…
But we’re not going to do any of that. You know that isn’t how we do things around here.
There’s a much better way to handle this kind of market instability, and I’m going to show you how…
Wall Street seems to be split when it comes to very small stocks.
Some folks think that trading small companies is the path to fame and fortune.
Conventional Wall Street would have you believe that you’ll lose all of your money. and it’s possible that you’ll develop dreaded diseases, or appendages may even fall from your body if you attempt to speculate in small stocks.
As is usually the case, the truth turns out to be somewhere in the middle.
If you chase small company stocks with a great story, but dubious fundamentals, you will probably experience severe pain and suffering of a financial nature.
If you try to trade in and out of them based on a chart pattern, you’ll probably get your financial head kicked in, repeatedly.
If you buy small company stocks because your insomnia kicked in and some guy on a 2:00 A.M. infomercial suggested it, you can pretty much assume horrible things will happen to your net worth in the near future.
If, however, you buy small companies that are earning high returns on the cash invested in the business and have strong balance sheets, you have a fantastic chance to make life-changing money.
Let me show you how to do it…