10 Investment Tips For Making Money During the Next 500% Super Boom Move

From Jeffrey Hirsch, Author of Super Boom

My very long term forecast for the stock market as detailed in my new book, Super Boom: Why the Dow Jones Will Hit 38,820 and How You Can Profit From It, is for a 500% move from the March 2009 low to Dow 38,820 by the year 2025. However, the bulk of this historic leap in stock prices is not projected to commence for another six or seven years when the next secular bull market gets underway.

A time of relative global peace with a reduced U.S. combat military presence overseas, accompanied by increased inflation and new paradigm-shifting technological breakthroughs will conspire to drive stock market to new heights 10, 15, 20 years down the road.

The key to profiting from this massive bull market rally is preparing yourself now and over the next several years while the market continues to move sideways, so that you’re not chasing the rally, but rather in perfect position to ride the wave of growth and gains all the way to the top. Being right about this future move will be one thing, but making money during it is all that really matters.

Below are my top ten tips for profiting from the next boom. The last chapter of Super Boom provides specifics on how to implement these strategies over the next 5-10 years, as well as the sectors, industries, and tactics that will likely benefit most during the giant 500% move that should run from around 2017-2018 to 2025 and beyond.

1. Buy Stocks Below Dow 10,000. The psychological line in the sand for the market since the year 2000 has been Dow 10,000. When the most widely followed stock benchmark in the world is below this key level, it is an indication that stocks are relatively undervalued and investors are fearful. Be contrary to the crowd and buy stocks when prices are low and the masses have already been selling.
2. Load Up On Stocks During Bear Market. Whenever a bear market is declared in the media over the next several years, pull up the truck and load up on stocks. By the time a bear market becomes official, stocks will have already sold off to undervalued levels. When fear and selling reach extreme levels that is the best time to buy stocks.
3. Focus on Stocks That Consistently Increase Dividends. These are the stalwarts of industry that have proven they can continue to grow and earn money year after year. These companies hold up well in flat and down markets and pay you cash dividends to wait for the big move. Companies that increase dividends every year have what it takes to succeed now and in the future.
4. Invest in Alternative Energy. Solar, wind, nuclear, and bio-fuel usage is on the rise. Technological advancements are being made and will be made that will improve efficiencies, safety, and cost relative to traditional energy sources. Alternative energy companies are currently cheap and some may fail. Alternative energy exchange-traded funds are a good choice to gain exposure to this sector.
5. Hedge Against Rising Prices with Traditional Energy. Economies are improving and energy demand is rising. While alternative energy use ramps up, traditional energy will remain strong.
6. Biotech & Genomics. Mounting healthcare issues related to our aging and growing society and the enormous costs can be alleviated by major advancements in the biotechnology and genomic areas. No other fields have the potential to impact the world in the way that medical technology does. Cures as opposed to treatments to diseases such as cancer, AIDS, heart disease, or diabetes will result in a global population that will live longer, more productive lives.
7. Benefit from Population Growth. Emerging markets are growing more quickly and their citizens are also living longer. Living longer results in the similar increases in demand as an expansion of actual population. Consumer demand is poised to continue to rise in spite of slowing population growth in developed nations. The continually growing population will need to be fed, watered, clothed and sheltered. Agribusiness, water resource and material companies should benefit from the next boom.
8. Explore Emerging Markets. The next boom may actually be sparked in the BRIC nations, Brazil, Russia, India, China, as they have the money, the young and ambitious populations, and the inflation necessary to spark invention. The rest of Asia, Latin America, the Middle East, as well as Africa have the most room to grow. Once current civil unrest dissipates, a more progressive environment is likely to emerge, fostering exponential growth.
9. Trade the Best Six Months Switching and 4-Year Cycle. These two major recurring market patterns have been amazingly reliable and continue to stand the test of time. Most of the markets gains have been made during the six months November-April. Since 1950, there have only been 9 years when the DJIA Best Six Months failed to delivery market gains. Market performance during the last two years of a presidential term has been much stronger than the first two years. Combining the BSM switching strategy with the 4-year cycle triples gains.
10. Sell Losers, Let Winners Ride. This tactic is always important. It is critical to preserve capital. Once the boom begins to take off, it will behoove you to go against your natural emotional inclinations and sell losing or worst performing stocks and let the winners ride. Sell losers quickly. Cutting losses short is the best way to preserve capital and letting winners run is the key to major profits.

• 500% Market Moves in the 20th Century (211955 Bytes)
  The following chart shows how war and then peace, inflation, and a secular bear market have resulted in 500% jumps in the Dow over the 20th century.
• The Next 500% Market Move (219573 Bytes)
  This chart represents how Jeff Hirsch expects the next 500% market move will look.