This portfolio manager's strategy uses just one ETF and his own 'crash indicator' to beat the market by 530%

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Don’t just fear the market lows. After a hard drop, stocks are ‘ripe to come back,’ says this money manager

Markets are pointing higher for Friday, but it’s been a rough few days, with the S&P 500 facing a six-week losing streak, its longest in a decade.

Providing our call of the day is the president and chief executive of Stock Traders Daily and portfolio manager at Equity Logic, Thomas H. Kee Jr., who is gearing up for what could be a bullish period for stocks, and says that’s all about understanding volatile days. “What that means is volatility. In normal market conditions you have volatile conditions,” he said. “It’s not what people are used to because stimulus has been a component since most people have been in the market nowadays, especially all the new [investors].” Pre 2010, markets were naturally volatile, he reminded us.

Since 2000, an investor putting money only in the S&P 500 ETF SPY and cash, moving to cash when his crash indicator was warning of high risk, but all other times investing in the S&P 500 ETF, would be beating the market by 530%, said Kee. The money manager’s message is clear: “Volatiltiy is here, it’s coming and you better be ready for it and your portfolio better be prepared to handle it as well. Because it’s really difficult for people who have never experienced real volatility to handle volatility,” he said.

 

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SPLG better than SPY. Thomas H. Kee Jr. must not pay attention to expense ratios.

Seems like everyone is trying to call the bottom each day. Hopefully one of these times it is right!

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