It was 1992…
My guts were turning inside out. My clients were losing millions as the market carnage rained down on me.
I hadn’t taken big risks. In fact, I owned some of the safest, most reliable stocks in the world. And we’d been having a great run…
But then, the country elected Bill Clinton as president. And his run for the White House created a political firestorm over drug stocks.
You see, one of his major campaign promises was to introduce nationalized health care. That meant price caps for all the major drug companies.
Before he even took his first oath of office, the entire pharmaceutical sector started collapsing.
Blue chips like Johnson & Johnson, GlaxoSmithKline, Bristol-Myers Squibb, Pfizer, and Merck were in a freefall leading up to the election. My clients’ portfolios were stuffed with these names.
I spent my days fielding angry calls, begging people not to sell.
Even though I was barely 20, I felt like my career was already over. But unlike most people, I had been investing since age 13. And I was a professional money manager by 18.
So I had learned a few things over the years… and one of the most important was the power of investor sentiment.
The Market Moves in Waves
I realized investor sentiment moves in waves. It goes from extreme euphoria (greed) to extreme depression (fear). As sentiment bounces between greed and fear, stock prices gyrate wildly – regardless of the quality of the underlying business.
The companies I owned were great. They were still earning money hand over fist. I just had the misfortune of being caught in an investor sentiment downcycle.
I knew if I could convince my clients to hang in there, sentiment would again shift in our favor. And that’s exactly what happened…
Take a look at this chart. It shows the average return of the health care giants we mentioned previously, like Johnson & Johnson and Pfizer, over the course of the 1992 election…
While shares of these stocks fell ahead of his election… after Clinton won, the health care sector suddenly shifted.
By the new year, health care stocks had clawed back almost all of their losses.
So what does that all mean to you?
This Anxiety Is Normal
Presidential elections raise anxiety on Wall Street. We saw that in 1992 with the Clinton campaign’s effect on the pharmaceutical sector.
We also saw similar uncertainty in 2008… 2012… and 2016 – when the markets swung wildly in the run-up to the election.
So what causes these market gyrations?
As I mentioned above, it’s investor sentiment. And we see it rip through the stock market ahead of every election.
Take the 2016 presidential campaign, for example.
This time, Hillary Clinton faced off against Donald Trump. And both candidates berated and threatened the drug sector during the campaign. That led to a broad decline in share prices.
Two of the most popular biotech exchange-traded funds (ETFs) – the iShares Nasdaq Biotechnology ETF (IBB) and the SPDR S&P Biotech ETF (XBI) – fell 30% and 40%, respectively.
It was a classic “bottom of the fear curve” investment. That’s why I argued the worst-case scenario was fully priced in. The news couldn’t get any worse.
After bottoming out during the 2016 election, IBB and XBI quickly recovered their losses and recently hit new highs.
What’s Going to Happen Next?
If we follow the script from elections past, a sector or even a handful of sectors are going to get slammed over one worry or another. Just like in 1992 and again in 2016, we’ll have massive opportunities to profit from the volatility ahead.
But what I am most interested about right now is not the election. Over the last few years, I’ve been studying a rare “Anomaly Window” that appears every few years. I thought it was just random, but I’ve discovered proof that it’s linked to a predictable date.
What’s special about this “Anomaly Window” is that while this window is open, certain blue-chip stocks experience insane moves.
Inside this window, the rules to wealth-building change.
It turns boring, stalwart companies into some of the most profitable stocks in the market. Banks, airlines, and even mining companies that spend years trading sideways suddenly offer investors outsized returns.
Looking at past Anomaly Window periods, you could’ve made huge gains on blue-chip stocks, like 472% on Citigroup, 882% on United, and 614% on mining company Newmont.
This window usually lasts just 28 days. It’s so urgent that I’ve scheduled a special free event to tell you all about it. I’m calling it 28 Days To Your American Dream. I want you to come join me at it on Thursday, October 8, at 8 p.m. ET.
To make sure it’s worth your while, I’m even giving you my entire list of 30 elite stocks to trade during this window.
You don’t have to know who’s going to win the election… or what new policies will disrupt the markets in 2021 to profit.
Let the Game Come to You!
Editor, Palm Beach Daily
P.S. To make this event even more worthwhile to you, I created an entire training series to prepare you for this rare 28-day window. And best of all, you’ll get free access to this series starting October 4 when you register right now…