As the old saying goes, streaks are made to be broken…
The S&P 500 has posted a positive return in each of the last seven months. But September is threatening to end that run.
On Monday, the index dropped 1.7% – its worst day since May 12.
Pundits cited a combination of reasons for the selloff…
Mounting fears that Chinese real estate juggernaut Evergrande Group might collapse under a major debt burden… potentially triggering turmoil in global markets.
Worries that Congress won’t raise the debt ceiling, which would cause the U.S. government to default on its current debt payments… and lead to widespread economic catastrophe.
And the continued surge of the Delta variant of the coronavirus… which is hampering the global economic recovery in certain areas.
But the reason behind the recent volatility may be as simple as this: Historically, the market can’t go higher forever, and if there’s ever a month for an upward streak to be broken, it’s September.
Indeed, September is historically the worst-performing month of the year for the S&P 500… down an average of 0.2%.
And an easy way to follow along with the market’s movements is through the CBOE Volatility Index (VIX) – Wall Street’s so-called fear gauge.
In the simplest terms, when the VIX is falling, the market is rising. And when the VIX moves higher, the market falls.
And as you can see, on the heels of the market’s fall Monday, the VIX rose to 28.8 – a 38% increase from Friday’s close – before closing at around 23.7 yesterday:
A VIX reading below 20 means investors are calm and complacent. While a reading above 20 means investors are fearful and nervous about the market…
But here’s the thing… at PBRG, we don’t recoil from volatility. Instead, we greet it with eager anticipation. Because, while other investors let fear rule their actions, we recognize the volatility for what it is: An opportunity.
So today, I’ll share with you one of the conservative strategies we’ve used to net 18% average annualized gains with a typical holding period of fewer than five months.
And the best part? With this strategy, we stack the deck so that heads we win… and tails, we don’t lose.
How to Earn Instant Cash From the Market
We call this strategy Instant Cash Payouts. It’s when we offer shareholders a form of “insurance” with “low-ball offers.”
In technical terms, it’s called selling put options.
Using a unique aspect of the options market, we agree to buy investors’ shares for a specific price and over a certain length of time in exchange for an upfront cash payout.
The cash is ours to keep – no matter what happens. And we only have to buy shares if they drop to our agreed-upon price.
The bottom line: We get paid to buy companies we love – at a discount. And we only target the strongest, most dominant companies on the planet. That’s what makes the strategy so powerful.
I repeat, we only make low-ball offers on the best companies in the market. These are companies that dominate vital industries. They gush free cash flow and profits, and they look after shareholders.
More importantly, they’ll make it through a market crash with relatively minor damage.
Sure, their share prices might fall a bit, but it won’t be a mortal blow. They’ll eventually recover.
But here’s the best thing…
Our Instant Cash Payouts increase when investors are fearful… like now. Think about it from your own perspective: You’re more likely to pay-up for insurance if you feel an event is almost certain to happen.
It’s no different in the stock market. And with blue-chip companies selling off with everything else in the market, now’s the time to strike.
Heads, We Win – Tails, We Don’t Lose
To help you profit from the current volatility, I’ve listed three blue-chip companies I’m watching closely. Once the levels I’ve marked are hit, we strike…
If you don’t know how to make a low-ball offer (sell a put option), consider buying shares when they drop to the level I’ve indicated in the fourth column.
If history is any indicator, they should rise by the end of the year, and you could cash out your gains by the holidays.
Look, September has been the worst-performing month in the S&P 500 over the last 30 years. So, with the market taking a breather, we have a rare chance to use volatility to our advantage.
If the market maintains a positive total return for all of 2021… it’ll be the index’s 15th positive annual return in the last 19 years. So history is on our side. And we’re using a stacked deck of three of the top companies on the planet to capture potential profits.
So don’t bet against the market. Instead, take advantage of this pullback and make low-ball offers on high-quality blue-chip stocks like those listed above.
You’ll earn instant cash for your offer. And even if it’s accepted, you’ll own these blue-chip stocks at an incredible discount.
Heads, you win… tails, you don’t lose.
Analyst, Palm Beach Daily
P.S. If you’re not ready to give options a try, Daily editor Teeka Tiwari has found another way you can beat volatility and turn a profit no matter where the market is headed…
With “Tech Royalties,” you can earn extra income – in the form of “free” crypto – without paying more than your original investment.
And with crypto mass adoption quickly taking off, investing in Tech Royalties could be the difference between simply supplementing your income… or moving the needle on your net worth.
To learn more about how Tech Royalties can grow your portfolio… click here.