May 26, 2021
Yesterday, we introduced you to investing pioneer Marc Chaikin. We shared a riveting interview with him to give you some background on his financial impacts thus far. Marc invented a series of stock indicators that are used by the biggest Wall Street firms and traders all over the world.
And last night, Marc held a special event where he talked about a new precise investing tool he’s created that can evaluate thousands of stocks with just the click of a button – the “Power Gauge.”
(Did you miss last night’s show? You can click here to watch a replay for free.)
Today, we have an eye-opening tale from Marc himself… about a 2008 horror story that could have happened to you.
But some good came from this sobering story… Marc claims it was the wake-up call that brought him out of retirement and motivated him to help “the little guy”… Instead of just working for Wall Street, Marc vowed to help the individual investor.
How My Wife’s 401(k) Ended My Retirement
by Marc Chaikin
I retired in 1999, hoping to spend the rest of my days relaxing and playing tennis…
I had worked almost nonstop for more than 30 years on Wall Street up to that point. During my career, I developed the now ubiquitous “Chaikin Money Flow” oscillator…
Now, as a regular investor, you likely haven’t used the tool in your personal financial research. But today, the Chaikin Money Flow is built into the world-famous Bloomberg Terminal… And Thompson Reuters, Bloomberg’s major competitor, has it on tap as well.
Traders use the Chaikin Money Flow to get a read on the money moving behind the price action of a stock. And by the late 1990s, it had become an industry-standard tool.
So by 1999, I had spent my life’s work collecting and interpreting financial data. It had paid off… And I was ready for a life filled with tennis, books, and relaxation.
In short, life was good… I was enjoying my retirement, and our wealth was still growing.
Then, 2008 came along…
“Marc, I’m paying him to ride my account to zero”…
That’s what my wife Sandy said to me midway through 2008. And it changed everything for me.
You see, my wife retired with me in 1999. After working as the vice president at beauty-products company L’Oréal for several years, she built her own business in marketing and consulting. And fortunately, her business was still growing in 1999.
Despite my Wall Street successes, we managed our retirement funds separately. And since her business was getting bigger, she didn’t have much free time on her hands. So it made sense for Sandy to pay an expert to look after her retirement.
Sure, the fees were high. But as the overall market rose throughout the early 2000s, the fees didn’t seem that important. Sandy was busy with her business… And her retirement nest egg was growing alongside it.
But as the financial crisis set in, Sandy’s 401(k) account was bleeding value almost every day. And at the time, it looked like there was no end in sight…
To make matters worse, her high-fee active manager didn’t want to talk to her… The few times she was able to get him on the phone, he was dismissive.
Then, something incredibly ominous happened…
On September 16, 2008, money market accounts “broke the buck.” That’s the fancy way of saying that money-market savings accounts – which were supposed to be safe places to generate income – were now losing money.
I vividly remember the exact words I told Sandy at the time… “This means we’re in deep trouble.”
I called my friend, Bill Griffeth. He was CNBC’s Closing Bell host at the time.
“Marc, what’s going on? We’re just about to air,” Bill asked me. He hadn’t heard the news about the money-market accounts yet. It stunned him.
Even worse for us, Sandy’s actively managed account was down much more than the overall market at the time… It was sitting on losses of about 50% at that point, while the broader market was down about 20%.
Sandy’s portfolio manager didn’t know what to do. And Sandy wanted out – rightfully so.
This situation is what kicked me out of retirement. It woke me up to the fact that plenty of regular folks were getting hosed. And while I’d created tools in my career to help Wall Street, I hadn’t done much to help out the little guy.
So I came out of retirement with a simple goal… To figure out how to help individual investors.
Now, my wife Sandy’s investing horror story isn’t unique…
Thousands of everyday Americans watched helplessly as their retirement savings were cut in half – or worse – during the Great Recession.
It was awful. And afterward, many folks made the worst decision they could possibly make…
They sold right at the bottom. Then, they stayed on the sidelines… They wanted to wait to get back in after things had settled down and weren’t as volatile. (Of course, that means waiting until after stocks have already recovered… But most folks don’t realize it.)
Sandy was more fortunate… She had me at her side. Not everyone has a 30-year Wall Street veteran to lean on, though.
That’s why I came out of retirement. I wanted to help out all the folks like Sandy – and anyone else who Wall Street had left behind.
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Today, I’ll tell you more about the system I created, how it works, and the No. 1 thing you can do to avoid repeating the worst mistakes of 2008…
To save Sandy’s portfolio, I first gave her some hard but truthful advice. As I told her…
You have to stay invested. Stocks won’t stay down forever. We need to ride this out.
After more than 30 years as a Wall Street insider, I knew that just “stepping aside” and waiting for things to settle down was the worst possible move. That’s because of how volatility tends to work after a big crash…
When it comes to the broad market, big volatility up follows big volatility down. A quick glance at the benchmark S&P 500 Index’s biggest moves makes this clear…
Major rallies have always come after a big bust.
Most individual investors don’t realize this. They don’t have a guiding light to keep them on course during market downturns. So they sell at the worst possible times… Then, they miss out on the upside that comes after.
In the end, Sandy fired her portfolio manager and we took things into our own hands… We rolled her retirement into an index fund at Vanguard.
The first priority was making sure she didn’t miss the upside in the recovery that was coming… And I knew we needed a plan to keep us steady.
To me, the next step was painfully obvious…
I had spent my career building quantitative tools for Wall Street. And I was darn proud of the work that I had done. With those tools, I had helped many elite investors find success…
But when it came to my wife – and the thousands of everyday investors who had just lost a large chunk of their wealth – well, I hadn’t done a whole lot for them.
As Sandy searched for a better solution, I knew that I had the ability and knowledge to fix this problem. So I ended my retirement and got to work…
I went on to build a set of quantitative tools specifically for individual investors. These days, it’s called the “Power Gauge”…
The Power Gauge looks at 20 quantitative factors. It’s a boatload of data. It covers everything from price performance… to fundamentals… to insider buying trends… to expert consensus.
Collecting and analyzing the data that the Power Gauge uses would take months for most individual investors to do on their own. And that’s assuming you even know what to look for and where to find the data.
But fortunately, the Power Gauge pulls all this data together in a matter of seconds…
With the Power Gauge, you just put in the ticker of the stock you’re interested in. It pulls all of the data using our 20 factors almost instantly… And it builds a complete report for you.
You can see the readings on each factor that the Power Gauge uses. And even better, you get a simple overall reading – from “very bearish” to “very bullish” – on the stock.
It couldn’t be simpler to use. But that doesn’t mean it’s anything less than professional level.
Most importantly, I designed it to be a guiding light in bad times. And that’s what individual investors like Sandy need. To succeed in investing, you’ve got to have a plan… a process.
The Power Gauge is my process. It levels the playing field. Every day, it helps investors make winning decisions in their portfolios, whether the market is going up or down.
It doesn’t have to be what you use. But you need something to guide you in tough times. So form an investment plan, and stick to it. It’s the No. 1 way to survive rough times in the markets.
P.S. Marc’s Power Gauge stock tool usually costs thousands per year. But for a short time only, he’s offering American Consequences subscribers one year of free access when you sign up. Click here to learn more about how you can access this money-making tool, plus Marc’s other reports and financial research.
Love us? Hate us? Let us know how we’re doing at [email protected].
Managing Editor, American Consequences
With Editorial Staff
May 26, 2021