Market Bottom: ‘Once You Really Hate Yourself, Buy Lower Than You Thought Was Possible’

Ben Carlson, portfolio manager at Ritholtz Wealth Management, is all in on “buying the dip.” 

History would say there is a considerable amount of evidence to support buying whens stocks swoon sharply.

“Fifty-six percent of the time, stocks were higher one year later. Seventy-two percent of the time, they were higher three years later. And they were higher 80% of the time five years later,” said Carlson.

These profit margins came after some of the biggest crashes in stock market history, such as Black Monday and the Great Financial Crisis.

The S&P 500 Index is down more than 20% year to date.

“So let’s say as long as we don’t have another Great Depression, the track record of seeing stocks higher 1, 3, and 5 years later following a huge down month in the stock market is pretty good,” Carlson says.

“Every investor’s told to buy low and sell high. But most don’t realize that buy low typically works out to buy low, then buy lower, then buy even lower, and once you really hate yourself, buy lower than you thought was possible.”

Goldman warning

The catalyst behind the stock market’s dismal has been the impact of the coronavirus, COVID-19. 

Goldman Sachs previously warned investors that a deep correction in equities was possible due to the coronavirus.

“We believe the greater risk is that the impact of the coronavirus on earnings may well be underestimated in current stock prices, suggesting that the risks of a correction are high,” wrote Goldman Sachs board member Peter Oppenheimer.

“Equity markets are looking increasingly exposed to near-term downward surprises to earnings growth.”

Iaccino: Bitcoin a Better Hedge Than Gold? Look at the Data

Bob Iaccino, editor of the Stock Think Tank, sees the relative stability of Bitcoin compared to gold as a sign that its legitimacy as a hedge is coming into view.

costco cost

The Dividend Stock That Belongs in Every Portfolio

If you are like me, then you are always looking for great companies that are on sale. What makes the company a bonus buy is when it also pays a

Bitcoin and Gold Slaying Stocks: Why Not Own Both?

The Bitcoin vs. gold battle rages on as the two are best-performing assets of 2020. The price of gold is up 26% this year, while Bitcoin has soared 87% —

Companies Pile On Debt. Big Headaches Later for Investors?

How have companies handled the cash crunch during this pandemic? I came across an insightful in-depth research report this past week that had a few interesting charts on this. See

Potential Options Payoff in Post-Covid China Rebound

The Chinese economy is starting to show signs that it is rebounding better than other economies around the world. China was the first country that had to battle the COVID-19

Retirement Income Tip: Buy High-Yielding Dividend Stocks

Imagine a scenario where you can make money while you sleep. Sounds too good to be true, right? Enter high-yielding dividend stocks. Now, there are lots of stocks in the

Beat the S&P 500 with These Specific Stocks

Today I'm going to briefly discuss a major error that most stock market participants make on a regular basis and ways in which you can substantially increase your stock returns.

Iaccino: Dollar Down, Stocks Higher, Plus PayPal Meets Bitcoin

A renewal of federal stimulus on top of monetary stimulus after the election is likely to support the stock market, says Bob Iaccino, editor of the Stock Think Tank. The

investor or pay off debt

Invest or Pay Off Debt? In a Pandemic, I’m a Stock Buyer

If you were to tell someone that you were putting any extra cash you had into the market instead of paying off debt, they might think you have lost your

bitcoin mass adoption

Bitcoin Mass Adoption Can’t Be Far Off — That Means Surging Demand

When you look at past technological developments — from the 19th century industrial revolution through the introduction of the telephone, personal computers, Internet, and smartphones — there is a typical

stocks overvalued

Is the Stock Market Overvalued? Not By This Measure

You many have heard the term “TINA” mentioned in various financial and investment commentaries in recent months. This is an acronym for “There is No Alternative.” It is built around a

clx options

Options Play: Take Advantage of Bearish Sentiment On Clorox (CLX)

We are in the middle of a global pandemic and one of the best weapons against the virus is cleaning surfaces with bleach. If we were to ask 100 people