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The stock market is the greatest learning classroom on the planet.

But remember one thing: You’re allowed to make mistakes. 

Not enough people tell others this in life. People are way too afraid of failure. 

It’s okay to screw up. 

I’ve made my fair share of trading blunders.

Naturally, I learned from them, and now, I have built a strong trading and investing philosophy that I can pass on, one person at a time. 

You’re going to have a bad trade or investment now and then. That’s just how it is.  

The trick always comes around to focus on the good. 

Trade. Then improve. Trade. Then improve. 

Looking back over the last four months (and the previous three crises), I wanted to talk about three lessons I think everyone needs to hear. 

Let’s dive in. 

 

Lesson One: Ignore the Bears

 

It’s always fascinating to listen to the bears sound off on television, predicting that the world is going to end. If you remember in March, hedge fund manager Bill Ackman told the world that “hell is coming.” It turns out, he had a hedge against the downturn, and he ended up making more than $2 billion due to the crash.

Then, he turned around and snapped up stocks on the cheap. 

I’ve paid close attention to the people saying that the world is on the verge of collapse. 

I’ve started to notice that more times than not – these people are selling something.

Maybe it’s gold. 

Maybe they’re the fund manager of an Inverse ETF.

 

 

Maybe they own junk that they’re trying to pass onto some other unsuspecting victim because their significant other keeps throwing their clothes out the window of their Manhattan apartment.  

The point is that history has shown that markets can rebound.

Don’t let short-term fear overcome long-term growth potential.

If you sell out of fear, you’re more likely to not get back into the market. You’ll sit on the sidelines hoping for a pullback that may never come. This happened to many people after the 2008 financial crisis, and it’s happening again today. 

  

Lesson Two: Innovative Tech Stocks Will Not Slow Down

 

I was surprised by the incredible run over the last three months by Big Tech stocks.

But then again… I wasn’t

Technology is the underlying driver of economic growth, economic expansion, and an increase in living standards. When major societal events take place, technology drives the new trends. 

Over the last decade alone, we’ve seen the explosion of 4G, e-commerce, digital banking, last-mile delivery, and radical healthcare innovation. There’s a reason why stocks tied to these trends have catapulted to the top of the S&P 500. 

Just think about Apple for a minute. It was only 14 years ago that they released their first iPhone.

The stock was trading around $17 at the time of its iPhone release (adjusted for previous stock splits).  

Today, the stock trades at $425 and is on the verge of splitting four ways. 

If you’d listened to the bears in 2011 and ignored the 4G and smartphone trends, you would have missed out on this.

 

 

That incredible rise – about 2,400% – comes despite TWO major financial downturns in a little more than a decade.  

And that’s just one company.

I was recently listening to a popular Canadian venture capitalist talk about the market, and he said that his industry in tech has never experienced a recession.

I think that’s accurate if you think about the tech firms that genuinely change the world. Even at the height of the Dot-Com bubble, these companies weren’t cutting jobs. They were focusing on their long-term growth, innovating, and creating the technology that we enjoy today.

With 5G on the horizon, the sky’s the limit for so many companies that will create the next generation of tools that dramatically improve our lives and standards of living.

Stay on board even if there is a price correction. It will take mettle to watch your investment take a big hit on paper every few years, but trust me, we’ve seen this play out on Apple stock alone multiple times.  

 

Lesson Three: The Trend IS YOUR FRIEND

 

I repeat this often to people because they tend to overlook the obvious. 

Look: If you’re serious about having A LOT more money in 10 years than you do now – you can tap into long-term trends that are a lock to produce gains. 

Where do you start?

Think about the obvious one. 

Population growth.

There are going to be 9.1 billion people on the planet in 30 years. 

People need to eat. 

People need housing

People need medicine and hospitals. 

 

 

I know that you’re going to hear a lot of noise that the planet can’t sustain that many people.  

To paraphrase a friend’s book, if a serious challenge lies ahead for humanity, an engineer will build a machine to solve it. Again, don’t listen to the bears. 

Focus on the technologies that will drive invocation to support the world ahead. 

I like biotech companies with a proven history of profitability. 

I like food companies that can reduce carbon emissions and create healthy lifestyles.

I like companies that will pick up all of the waste left behind by hundreds of millions of people. 

I like the firms that tap into the apparent trends that surround us. Best of all, these companies typically generate a lot of cash flow, meaning our investments will benefit from strong dividend payments or stock buybacks.

I know it’s easy to look at the headlines and feel some dread. 

The news is designed to make you feel like you’re falling down a hill, and there’s nothing to grab to prevent the fall.

I promise: Just focus on the trends, buy the stocks, and enjoy the ride. 

Sure, economic downturns will occur, but they come and go.

You’ll forget about them during the next Bull run.

Author: Jeff Bishop

One of the best traders anywhere, over the past 20 years Jeff’s made multi-millions trading stocks, ETFs, and options. He is renowned as an incredible trader with a deep insight and a sensitive pulse on the markets and the economy. Jeff Bishop is CEO and Co-Founder of RagingBull.com.

Even greater than his prowess as a trader is his skill and passion in teaching others how to trade and rake in profits while managing risk.

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