Exploit the Stock Market Roller Coaster
Fear is ramping up...
The S&P 500 Index has fallen nearly 9% in the last month alone.
The Conference Board's Consumer Confidence Index recently had its biggest monthly decline since August 2021.
The CBOE Volatility Index ("VIX") – also known as the market's "fear gauge" – is up 36% this year, hovering around 25 as I write.
And earlier this week, a report from JPMorgan put the chance of a recession at 40% – up from 30% in January.
But it's not all bad news...
On Wednesday, the U.S. Bureau of Labor Statistics released the consumer price index for February, which showed that inflation is slowing. And similarly, the producer price index beat expectations yesterday, falling 0.5 percentage points from January to February. While prices were up for both indexes, they rose less than expected.
Still, the U.S.'s trade war with Canada dominates the headlines every day, as the countries continue swapping barbs and threats.
It's clear that investors are spooked and consumers are worried about rising food and energy costs.
And while there are still unknowns, we're not in entirely new territory. The chart below shows how the S&P 500 behaved during the U.S.'s last trade war (with China). As you can see, stocks whipsawed around for more than a year...
Ultimately, markets ended the trade war about where they started. But the volatility in between was a dream scenario for traders who understood that every dip was an opportunity to make a lot of money.
That's where we are today. Average investors are taking money out of stocks. But the smart investors are turning to a strategy that lets them profit from the fear.
According to my colleague Greg Diamond, the next few months will be highly volatile. He believes that events like next week's Federal Reserve meeting and President Donald Trump rushing to push new policies through before April 30 (the 100th day of his second term, a symbolic milestone) will create profitable opportunities for investors brave enough to stay in the market.
Longtime readers know that I take advantage of volatility in my Retirement Trader newsletter, collecting modest but consistent gains. Greg takes on more risk... but he has a great track record of big gains.
Greg doesn't believe in letting emotions rule your investments. Instead, he has a system that analyzes cycles and more than 100 years of historical data. It's not about reading the news and trading after the stories have already unfolded. It's about recognizing patterns that happen over and over again to make huge gains... all without ever actually purchasing a stock.
If you're ready to profit from the wave of volatility, click here .
Now, let's get into this week's Q&A... As always, keep sending your comments, questions, and topic suggestions to feedback@healthandwealthbulletin.com. My team and I read every e-mail.
Q: I have dry age-related macular degeneration ("AMD"), and my doctor has recommended wearing sunglasses. How does this affect the benefit of a walk in the sun? Should I walk longer? – L.E.
A: Thanks for your question, L.E. Let's start with a brief overview for readers who aren't familiar with AMD...
Dry AMD is an eye condition that causes blurriness and gradual vision loss. It gets its name because the macula – the part of the eye that provides central vision, allowing you to do things like read and drive – dries out. About 85% to 90% of AMD cases are the dry variety.
There's another form of AMD called wet AMD, which is more severe and less common. It occurs when blood and fluid build up between the retina and the macula. This causes the macula to lift from its normally flat position, distorting your vision.
If you have either kind of AMD, sunglasses are an important part of protecting your vision from further decline. They also protect your eyes from damage that can lead to cataracts.
But don't worry, sunglasses won't significantly interfere with your absorption of vitamin D (which helps improve your immune system and slow bone loss). Our bodies naturally convert sunlight into the so-called "sunshine vitamin" when it hits our skin.
Because of this, one thing that could prevent your skin from making vitamin D is sunblock. So try to use a low-SPF sunblock or go out in short periods to avoid sunburn.
All it takes is about 20 minutes of midday sunlight each day on 40% exposed skin (like wearing a T-shirt and shorts) to get the vitamin D that you need. About 50% to 90% of your vitamin D will come from the sun, while your diet will make up the remainder.
So if you're out on a sunny day, protect your eyes by always wearing sunglasses, then soak up the vitamin D you need.
What We're Reading...
- Did you miss it? The market won't stay down for long.
- Something different: ChatGPT is learning mindfulness to combat its anxiety.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
March 14, 2025