Marjorie, a subscriber to Alpha Investor, sent me an email last week.
She didn’t beat around the bush…
“I’m afraid to put any more money in the market.”
And she’s not the only one.
If this is your first bear market, I totally get how you’re feeling.
It looks like the end of the world is quickly approaching.
And watching your portfolio head lower is like a punch to the gut.
I totally get it.
That’s why I’m glad you are a member of the Real Talk family.
I’m not scared, worried or fearful when prices are falling.
And the reason is simple: I know what comes next.
Because this isn’t my first, second or even third bear market.
In fact, it’s my fifth since I started on Wall Street in 1983 … almost 40 years ago.
Eventually, bear markets end and bull markets begin.
And how you act now, will make all the difference in your net worth over the next few years.
Let me show you what I mean…
Walmart
Imagine it’s the late 1960s and you live in Sikeston, Missouri… Population: 14,000.
A new department store recently opened, in fact, it’s the chain’s first store outside of Arkansas.
Walmart, founded just a few years earlier, becomes your department store.
You love shopping there because they offer lower prices, huge selections and they are local.
The big department store would never dream of opening in a small town.
Instead, they opened in big cities such as St. Louis, Memphis and Kansas City.
Sikeston, MO … a two-hour drive from St. Louis.
That’s why after only a few visits, Walmart now is your favorite place to shop.
In 1970, Walmart became a public company.
While you never bought shares of any company before, you buy shares of Walmart.
Now, you don’t know much about finance or the stock market or even the price of tea in China.
But you do know one thing: Walmart is a great business. You’ve seen it grow like a weed.
The company now has 30 stores and continues to expand.
You feel pretty confident and invest $5,000 and buy 300 shares.
Those shares came as real stock certificates back in the day.
You put them with your important papers, leave them alone and go on with your life.
Kids, house, career. Now, bouncing your grandkids on your knee.
You were too busy having a life to worry about Walmart’s quarterly sales, earnings reports, conference calls or the unemployment rate.
You just kept shopping at Walmart, fighting for a parking spot each trip.
Then There’s Frank
One more thing… When you bought shares, so did your college-educated brother-in-law.
Let’s call him Frank.
Frank doesn’t buy the stock because he shops at Walmart and loves the business.
Nah, he’s too smart for that.
He bought the shares because his broker told him the stock was going public and the price should jump.
So, instead of focusing on what the business would do, Frank and his broker focus on what the stock price would do.
Well, the stock IPOs and moves higher. Now, Frank’s happy.
But then a few years later in 1973, stocks head into a bear market.
And over the next year or so, stocks around the world tumble.
In fact, this bear market is the worst stock market downturn since the Great Depression.
As the U.S. dollar tumbles, inflation soars to 12%, and the economy goes into a deep recession.
Watching the stock market fall by more than 50%, Frank panics.
He sells all his Walmart shares and is happy to make a small profit.
And now comes the moment of truth.
Frank’s $80 Million Mistake
What you do next makes all the difference for what your net worth will be over the next 20, 30 … even 50 years.
Frank is in your ear saying: “Get out before you have nothing left.”
But you don’t do anything.
You might not be a financial genius, but you can see Walmart continuing to grow.
They now have close to 80 stores — doubling their store count in only five years.
So instead of selling your shares, you go on with your life.
Now, let’s fast-forward to today.
Frank is still chasing stock prices, watching every wiggle and jiggle of the stocks in his portfolio.
And Walmart is the world’s largest company by revenue.
They now have close to 11,000 stores in more than 24 countries.
So you decide to sneak a peek at how much your 300 shares of Walmart are worth.
At the current share price of $130 accounting for splits, your $5,000 has turned into $80 million!
And that doesn’t include dividends which pay out more than $1.4 million each year.
Here’s the Real Talk: Don’t be like Frank. Invest in a business, not a stock price.
That’s how you’ll make money and only worry about living your life through every kind of market.
Big Picture
When stock prices fall — hard like in a bear market — investors will react irrationally.
They believe the business must be going belly up just because the price is falling.
In fact, during the bear market of ’73 to ’74 when Walmart’s share price fell 66%…
The company reported record sales and earnings!
If that doesn’t tell you why the stock price doesn’t tell you much about the business, I don’t know what will.
And here’s my lesson for you during this current bear market:
Buy quality businesses … in industries that have a tailwind … that are run by rock-star CEOs … at attractive prices.
Then, let the business make you money.
You only need one Walmart-type stock in your portfolio to become wealthy.
So, it’s really important to keep the focus, especially now as stocks might even fall even lower than they are now.
Remember this…
There will be bluebirds over the white cliffs of Dover again, just you wait and see.
Regards,
Charles Mizrahi
Founder, Real Talk
? If You Wait for Stocks to Rebound … It’ll Be Too Late ?
Real Talk: This is the last great wealth creator of our generation.
Now.
Not the bull market that will follow this bear market.
That’s why the next few months are the ideal window to invest in “M-Class Stocks.”
The last three bull markets each lasted 10 to 20 years.
Can you afford to wait another 10 or 20 years to build wealth?
This message went offline last night, but it’s so urgent, we reopened it for you today.
Click here now to watch Charles’ new video presentation … before it’s too late.
