EP 112: A Recession Is Coming… Don’t Make These Mistakes

The recession... it's coming, or maybe it's already here. Either way, I want to help you so you don't make these four investment mistakes.

We typically don't know we are in a recession until we are already in it! We have to look back and see if there has been two quarters of negative GDP growth along with rising unemployment rates.

When we finally can see we are in a recession, we are already six months behind! 

Whether we are already in a recession, or going into a recession, there are a few mistakes almost every investor makes. In this episode, let's discuss them so you can try to avoid them if possible. 

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When most people hear things are going to go bad, or things are already bad, they unplug and disconnect from their portfolio and the stock market. 

I see it with my students too. They stop showing up for class and stop taking their courses. 

When you unplug and disconnect, it takes time to ramp back up and get reacquainted with the market. When you're not looking at the news or checking the charts, you're not seeing if the market is getting better or worse.

You're not recognizing if one of your companies may be at a great place or price to start investing. 

It's about maintaining your muscle memory, you need to keep up your skills so you don't go back to the beginning and erase all of your prior knowledge. 

Always be connected with the market. When you disconnect, you remove the opportunity to capitalize on those patterns or moments when it's time to act. 

Some people say they aren't going to put their money to work until they find a bottom... but no one has ever been able to accurately call a bottom. 

During the pandemic, everything sold off at the beginning of March 2020. If you weren't engaged during this time, you missed the opportunity. If you had bought on the way down, or near the bottom, when things turned around you were potentially able to make some really good money. 

If you were trying to find the absolute bottom, there's a good chance you woke up and the market was higher than it was the night before.

Don't miss the opportunity by trying to get to the absolute bottom. It 's very hard to pick the bottom, but I guarantee I can show you how to not buy at the top. 

The question you should be asking is "how long before it returns to the top?" If it's already down 50%, how much farther will it go? It's unlikely big companies such as Amazon are going to go down much more when they are already down 40%-50%. 

So don't worry if it's not at the absolute bottom, just know it's not at the absolute top so it may be a good time to put money to work. 

Investing is choosing good companies, finding them at a decent price, waiting long term, and ideally hoping they go up. 

Trading is taking advantage of patterns and the chart, the momentums... things that we see happening in the current economic environment. You might see a stock or sector move into resistance and start to sell off.

Trading allows you to jump in to make money quickly, by taking advantage of what's going on right now in the chart. We aren't paying attention to the news, we see an opportunity to go in, snatch some cash, and get out. 

But you can make the mistake of overtrading. 

If you are watching the market going up and down and trying to make predictions, you could possibly get a prediction wrong. If you get your prediction wrong four times, the next trade you make is most likely to be a bad one. 

We don't hit continuous home runs.

So when you hit a home run, practice on your next trade. This is where people make $5,000-$10,000, and then turn around and lose it by overtrading. 

Sit on your hands and be patient. Take the most highly probable set ups. When you see it's the one, put your cash to work.

Practice, paper trade, and don't double down for the next one.

A lot of people aren't paying attention to this one. 

If you're sitting on the sidelines saying you're going to invest when the market goes back down, you haven't been learning the market or how to invest. Now it's back down to those levels... and you're asking, "how does it work?"

You should have already been prepared for this moment.

You get prepared during this time in the "off-season" when things aren't working or down. 

If the recession lasts for six months, imagine you've been studying for that time. Looking at charts, understanding the market, and practicing buying and selling. Are you going to be more or less prepared to make money as we come out of the recession? 

Don't be late to the party by putting off what you could learn now. 

When the recession hits, so many things go on sale... cars, houses, material goods. But don't overextend yourself and buy what you don't need before the time comes. 

When the prices come down, it's time to invest. Purchase a property, or a car, or even some stock. It's time to buy when the prices are good, but most people don't have the capital prepared for it. 

How can you raise extra money to be prepared for this time in the future?

When everyone else had their head in the sand, some of us have been prepared for this moment. Don't you want to be prepared for this when the time comes?

This is the time for the market to pay you back. 

Opportunities may become plentiful for us that have been preparing. 

How can you get prepared during this time? Join us at Power Trades University. Let's get through this and potentially profit on the other end together.