Can Mike Tyson Save Your 401(k)?

Let’s start with something your broker will never admit…

The number one job of the stock market is to lure you into doing the wrong thing at just the right moment.

The market has no master and is incredibly efficient in creating the fewest gains for the least amount of people…

And if the markets weren’t tough enough when they’re not being manipulated, they’re almost impossible when there’s government intervention and manipulation.

So you must have a plan.

A plan for both the good market years and the bad market years, which most would use the phrases “bull markets” and “bear markets”.

Catching these opportunities has everything to do with a plan, a plan that is based on market movement and NOT your advisors business model… or your “pick-of-the-month” newsletter’s business model.

And whenever I think of planning I look to the venerable investor Mike Tyson.

Yes, that Mike Tyson – the bite-your-ear-off-in-a-fight – Mike Tyson.

In his 1996 Holyfield/Tyson fight “Iron Mike” made a great point about investing that has stuck with me. Let’s pick it up from the pre-fight interview.

Reporter: “Mr. Tyson, Evander Holyfield says that he has a plan for you tomorrow night.”

To which Mike Tyson replied, “Everyone has a plan until they get hit!”

True, true Mr. Tyson.

And this is one of my points. You have to have a plan that includes bull markets and bear markets, a plan that includes placing your money in a market that wants to create the fewest winners.

A Plan that is aware that the asset you’re in right now will fall 50% to 70% at least once every 15 to 20 years.

As Ray Dalio often says, “If you’re not ready to lose 70% of your money, get out of the market”.

Now Ray doesn’t ever lose anything near that, but he’s prepared to take a punch to make sure he doesn’t get knocked out.

Don’t know who Ray is…?

Ray Dalio runs the largest hedge fund in the world and is a billionaire himself. He knows a thing or two about getting punched and punching back.

The market is agnostic but not gentle.

It doesn’t care where your money came from, who you are or what your background is.

The stock market is democratic in its ‘hits’ to wealth.

The industrial investment complex didn’t get rich by knowing where the market was going, it got rich from making money from its clients whether their clients made money or not.

So when I say democratic I really mean democratic. The market is an equal opportunity destroyer AND creator of wealth.

Back to my point of planning.

Here is the cold hard fact…

After every bear market there is a bull market… AND after every bull market there is a bear market.

Most investors are only prepared for when things go well, a.k.a. a bull market.

Doesn’t that seem weird?

The way most people invest is like driving a car with one gear with no ability to reverse, turn right or turn left.

So if you want to treat your money well, you have to understand how to investing during both a bear and bull market.

And most people don’t.

And they don’t because they’ve been wrongly taught that getting beat up and losing 30%, 40% or even 50% of their money is part of the game.

It doesn’t have to be this way.

Do you get it? “Buy and hold” only works in bull markets. And the “buy-and-holders” gets clobbered in bear markets. Doesn’t it seem weird that you were never taught this by the industrial investment complex?

Here’s a point you may want to remember.

You cannot look to your broker.

You cannot look to your “pick-of-the-month” newsletter

You cannot look to your discount broker.

You cannot look to your big-box adviser.

You cannot look to your independent adviser.

Why?

Because they will all tell you the same thing with small variations. But at the end of the day you will end up with a well-diversified portfolio that does great in bull market years and horrible in the bear market years.

Some people think it’s about time to step outside the complex and see what really works. There’s a better way and I can show you.

Remember the industrial investment complex makes money whether your money grows or not. So you cannot solely look to them for guidance.

Do you want to know what the key is during a market sell-off, like 2008 or 2000?

Those who lose least, win.

One of the key differences between a bull market and a bear is point of view.

In a bull market your job is to position your money for growth and then step away. In a bear market your job is to step away until your money is positioned for growth.

Read that paragraph again.

If you comprehend what that one short paragraph says, you’ll be ahead of everyone.

And the one difference?

You’d be okay with stepping out of the market.

What’s more, I do not see this type of planning taught anywhere. No one is teaching it.

Even newsletter companies that rail against Wall Street.

They keep selling you “pick-of-the-month” ticker symbols as the stock market sells-off.

It’s not about stock picks, it’s about knowing what type of market we’re in, that’s what matters most.

Just look at all the publicly traded brokerages and big-box advisers:

Schwab

Fidelity

JP Morgan

Goldman Sachs

Morgan Stanley

Ameriprise

AG Edwards

Edward Jones

Merrill Lynch

Wachovia

Bank of America

…and the list goes on AND doesn’t even include insurance companies.

Publicly traded companies all need consistent quarterly income.

Consistent income is gotten by charging fees…fees in bear markets or bull markets. Trading fees, fund expenses and commissions.

You get it? They are on the other side of the table from you.

If you are serious about learning to protect and grow your money then you are going to need a plan that understands when we are in a bear or bull market… This is crucial understanding.

…And not a bear or bull market as defined by the industrial investment complex. But one that is defined by price.

If you want to make sure you are never caught short, if you want the ability to know when to be in the market and when to be out of the market, then you may need to step outside of the complex.

You see…

Mike Tyson had a plan when he was in the ring. And because he did, he made $300 million during his career.

BUT because he didn’t have a plan for outside the ring, he lost it all and filed for bankruptcy in 2003.

Do you want to see if what you are doing is best for your money?

If so there is an easy next step.

I’ve put a training together called, The Diversification Myth. It’s completely free and will give you insight into how aligned your plan is to the industrial investment complex.

The plan I’m talking about is the same plan that allows everyday people, who don’t want to be staring at their computer screen each day, but want to make sure they are on the right side of the market.

That plan has their life on the blue line in the price chart below.

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Mike Tyson had his career living on the blue line but not his investment plan.

But it’s not too late.

Join the movement and finally see what really works in investing.

If you are not already, you may want to sign up for my weekly investment thoughts. Each week I look to the markets and tell you what they are telling us about the upcoming days, weeks and months.

My commentary is not just what’s interesting, though it will be. But more importantly, what’s important.

Just look to the right hand column of this post and at the top you will see an opt-in form.

In Your Corner,

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