I want you to have the best 2018 you can have. That’s why I am breaking it allllll down: Trade War, Tariffs, Taxes, and more.
(Also good to note, we changed my podcast name! The Stock Market is more than just trading, which is why we have evolved into the “Money, Markets, and Mindset” Podcast.)
You can also listen on iTunes and Stitcher
Tariffs
The market has been crazy lately! Are tariffs terrorizing your trading account? It seems that every time the President tweets about Amazon or tariffs, the market has a reaction. And if you don’t have the right training, this can really throw your game off. You have to stop paying attention to everything that is going on in Twitter because it can mess with your mind. Every time you hear a tweet, you may think your trading is over, or that the price of everything is going to go way up.
Inside of our Group Coaching program, we share the mindset to have when things like this happen in the market. Three things move the market: the technicals, the practicals, and the fundamentals.
Technicals – what we see on a stock chart
Practicals – what’s happening in the news/world
Fundamentals – the balance sheet, profit, the revenue
From a technicals standpoint, we are at a position where things are looking like a good buy – things are near support. When we look at the fundamentals, the US economy is very strong right now, earnings are good, the tax cuts are positive, companies are hiring, etc.
That leaves you with the practicals. You should be learning how to read the stock chart because this helps you calm your emotions. Even though the tweets are saying the market is bad, you know it is the time to buy because you can look at the charts. Then when you see and understand the fundamentals, still looking good. So what is moving the market up and down? That is the practicals. Which are trade wars, the tweets, and the news making it seem like more than it is.
If the economy is doing well and we should be starting to buy, the only thing is holding us back are these tweets and the news.
- If nothing happens with the trade war, then in theory we are right back to where we started: in a great economy.
- If the tariffs do come into play, we are looking at the long-term.
We can take some short-term pain for some long-term gain
Another point is that they can only talk about tariffs for so long that we become immune to it. It looks like it is a negotiation tool.
The key is: this can mess with your mind and make you think you need to sell everything. And if you aren’t being coached in the right way, you will not think about it in a realistic way. Think about it: we are still going about our normal business, buying on Amazon, etc. Then why are we panicking and selling everything in the market? Just because of the news?
Ask yourself: What does this actually mean for me, the companies I trade, and my trading account?
How you should be getting prepared
Will you be ready once the tariff situation plays out and there is a resolution? We have already priced in the sell-off and the pullback. So either it doesn’t happen at all or if it does happen and it is favorable to the US, will you be ready to go Bullish and put capital to work?
If you are waiting and sitting on the sidelines, you are going to miss out. You need to slowly put bullish capital to work based on anticipation either way. The result could play out longer with less of an effect, or it won’t even go there, or it will go there and be beneficial. In my trading experience, all options are bullish scenarios. So will you be in the market, or will you be sitting on the sidelines?
Option Trading
There are a lot of people who think that trading stocks is all you need to know. But in this market with all of its volatility – being up then down then up again – the best protection you have and to make money is having option trading on your side. This is a market where you need every tool in your box to be profitable.
If the only tool you have is to buy and hold, then your house got rocked the last couple of months. If you were trading puts, it is possible you were able to make money.
If you owned stocks, you could do covered calls, which is selling calls against yourself. Or if you just had options, it was a great time to do some spreads. These are advanced strategies which we teach inside of Power Trades University.
The market won’t go up forever – it will get hurt sometimes. Do you have a strategy when those times come?
What happens if the market is just going sideways? You may not be losing but you aren’t making money. If you just know how to buy stocks, your only game plan is to wait it out. That is not one that will help you become a confident trader in this market.
When I was in middle school, my teacher gave me a C or D grade. I went to parent-teacher conference with my mom, and I thought he was racist or just didn’t like me. I had excuses. Because of course I wasn’t the problem, right? The teacher looked at me – took his pencil, erased my original grade, and said, “I’ll give you an A, but you still won’t know the information“.
When I think about you reading this blog post, comment on YouTube, etc… I always think about this teacher.
People always think that all they need is extra money and that will solve the problem. People think because they have money they can get into the Stock Market without any courses or education. “Why would I pay for education, I got $4K from my refund back?” I think about my teacher.
You may have money – but you still don’t know the information.
You can look at those who are “successful”, but they can get swindled out of their money by trusting the wrong people. They have the money, but they don’t have the information.
Mindset
You want to get the information BEFORE you get the money. So when you get the money – you are ready! You can jump into the market and apply the strategies. You already have the knowledge, you have been practicing, you already know what you are doing. You will be ahead of the game anytime you get finances!
“If you stay ready, then you don’t have to get ready” – Eric Thomas
Most people do not stay ready. “I’ll learn about the stock market when I get money”. The problem with that is, you do not know what type of market you are walking into.
I want to encourage you to get the information:
- Learn how to read stock charts, then you do not need to rely on the news or twitter. You can determine yourself if it is a good time to buy or sell.
- You need to get the education on how to do fundamental research – gain insight into the company’s earnings and finances so you can understand if it is just hype or if companies are truly doing badly.
- Every person needs to learn how to trade options – expand your tool box.
Just knowing how to buy and sell stocks is like trying to build a house with one tool. It doesn’t go very well if all you have is a hammer. “Ignorance on fire” – you’re just excited with your hammer! When you don’t have options, you only have a hammer. Only if the market hammers higher will you succeed. What if the market falls? Or goes sideways? Yeah.. you still only have a hammer.
When you have the information, the money will follow.
Back in the day when my cousin and I wanted to dive into the market, we were trying to figure out how to get some money. We knew if we could get more money we could do some damage. I applied for a student loan even though I had a scholarship, and I took $10K and put it into the stock market and made my account $120K in one year.
But if I didn’t have the information – I would’ve blown that $10K. I would not have known what to do with it. But because I knew what I was doing already, there was zero lag time in putting that capital to work. I am not telling you to do that – take your student loan or put a loan on a credit card. Definitely not recommending it, it just happened to work for me. I had low risk, the information, and it made sense for me at that time.
When you don’t have the information, you will have lag time even if the money came tomorrow. You won’t have any preparation done.
Do you have the knowledge, and are you prepared?
If I can be of any service to you, reach out to me. Email us, check out our other podcasts and webinars and start TODAY. Get the tools in your tool belt so when the opportunity comes, you will be ready.