Crush the

Market!
The Top 18 Tips That Will Help
You Profit in the Stock Market
2nd Edition

By Tim Morris
Copyright© 2022
All Rights Reserved ®
Published by ZML Corp LLC
 Table of Contents
Disclaimer
Introduction
Tip #1 Markets Average Five Dips of 2% or More Each Year
Tip #2 Markets Average One 14% Correction Each Year
Tip #3 A Market Crash of 20% of More Occurs Every 8 Years (on average)
Tip #4 Most Stock Rise and Fall with the Market
Tip #5 Markets Rise About 3/4 of the Year
Tip #6 Stop Overtrading
Tip #7 Over the Long-Term the Stock Market Significantly Beats Inflation
Tip #8 The S&P 500 Averages 9.8% a Year
Tip #9 Bonds Help to Limit Volatility
Tip #10 Gold is Okay… Not Great
Tip #11 Diversifying is Key
Tip #12 Most Hedge Funds Do Not Beat the Market
Tip #13 Technical & Fundamental Analysis Don’t Really Work
Tip #14 90% of Traders Don't Profit in the Stock Market
Tip #15 Trading With Margin is a Bad Idea
Tip #16 Dividend Stocks are Best During Retirement
Tip #17 90% Investing / 10% Speculating
Tip #18 Never Stop Learning
Final Thoughts

2
 Disclaimer
This special report is written for entertainment and
informational purposes only. Investing in the stock
market involves a great deal of risk, and you could
potentially lose all your money in the process. You
are responsible for your own behavior and none of
this book should be considered legal or financial
advice. Neither the author nor publisher is a licensed
broker or investment advisor. Talk to a licensed
financial advisor before making any investment
decisions. The author may make a small amount of
affiliate income from links included in this book. It
is illegal to copy or distribute any part of this book
without written consent from the author or publisher.
Copyright © 2022, all rights reserved. Written by
Tim Morris. Published by ZML Corp LLC.

3
 Introduction

In this special report, we will be going over 18

important tips that pertain to the stock market. These
are tips which have taken me many years to acquire,
which you can use as a foundation in your financial
journey. Young or old, novice or Wall Street
professional, you’ll be sure to gain influential
knowledge reading this special report.

I wish someone told me these tips when I first started

trading, which is why I created this report and now
will be sharing them with you. Hope you enjoy!

4
 Tip #1
Markets Average Five Dips of 2%
or More Each Year

You turn on your TV or radio and hear the host say

"the market is down 300 points." When someone
refers to "the market" in the United States, they are
referring to one of the following indexes:
• DOW
• NASDAQ
• S&P 500
…with the S&P 500 being the most commonly
referenced.

On most days, the market stays in a small trading

range, however a dip of 2% or more in one day
occurs about 5 times a year. When these dips happen,
many new investors get scared and end up selling
their positions ⁠— a costly mistake.

These dips are a normal occurrence in the stock

market. They tend to last just a few days, at which
point they correct themselves and the market heads

5
higher. So next time you turn on your TV and see the
host screaming the market is down, don't stress too
much about it.

6
 Tip #2
Markets Average One 14%
Correction Each Year

What you have to understand about the stock market

is it's volatile. It has its ups, but it also has its downs.
With that said, just because the market is down 10%
or 15% does not mean the sky is falling and we are
heading for a recession.

A correction, which is defined as a 10% or greater

decline in stocks, is a natural part of the booms and
bust of the market. On average, a 14% correction
takes place once a year. Now this isn't to say every
year we will have a correction, or that there can't be
two corrections in the same year; this statistic is just
an average.

Corrections tend to last a few weeks to a few months,

at which point the market rallies back to its previous
high. Corrections can be caused from world
economic affairs, government policies, interest rate
increases, and a host of other events.

7
Considering corrections are so common, they are a
great time to buy stocks which are “on sale.” So if
you have some idle cash laying around, or you have
gotten paid recently from your job, consider buying
into stocks when a correction occurs, as this will help
to increase your portfolio returns in the long-run.

8
 The Green Line
How to Swing Trade the Bottom of Any Stock Market Correction

Shortened Link to Book:

linkpony.com/books

A correction in the stock market occurs, on average,

once a year. What if you could capitalize on this
correction by buying near the bottom and selling at
the top? In The Green Line, Tim shows you how to
do just that, letting you in on a little known indicator
which he has coined The Green Line. Find out more
by going to the link above.

9
 Tip #3
A Market Crash of 20% of More
Occurs Every 8 Years (on average)

While the markets rise over the long run, sometimes

they go down — and sometimes by a lot. On average,
the markets go through a 20% or greater crash every
8 years, commonly referred to as a bear market.
Again, this is just an average. Crashes have occurred
between shorter time periods than this, and over
longer time periods as well.

While recent crashes have been dramatic (e.g. > 50%

drop), the historical average decline going back to
the 1950s is around 36%.

Similar to corrections, crashes are actually a great

time to buy stocks. The difference here is you are
able to buy stocks at an even greater discount, thus
allowing you to increase the overall profits in your
stock portfolio.

During crashes, try to remain calm and abstain from

selling. No one can time the market perfectly, and

10
you could easily sell your entire account right at the
market bottom. Not only this, whenever you sell
stocks, you have to pay taxes on all your gains. This
is why holding stocks indefinitely, while using
corrections and crashes as an opportunity to buy
more, is the most beneficial route to employ in your
portfolio.

With this said, let’s go over a simple test (with a

twist). The question that follows is from a book titled
Winning the Loser’s Game by Charles Ellis.

Question: If you had your choice, which would

you prefer?
• Choice A: Stocks go up—by quite a lot—
and stay up for several years.
• Choice B: Stocks go down—by quite a
lot—and stay down for several years.
Make your choice before you look at the next
paragraph.

Without looking ahead, which did you choose?

If you selected choice A, you would be joining
90 percent of the investors—both individual
and professional—who’ve taken this test.
Comforted to know that most investors agree
with you? You shouldn’t be. Unless you are a
seller of stocks, you would have chosen against

11
 your own interests if you chose A.

The reason why Charles states this is because amount

of stock you can buy increases when the market goes
down. And because we know the market will
eventually increase in value and regain its highs, it’s
actually counterintuitive to not buy stocks during
crashes.

Hopefully this insight will help you remain calm and

maintain a better peace of mind during the inevitable
bear markets which will occur. Being human, most
investors prefer rising markets and buying shares
when stock prices are high. Likewise, most investors
experience negative feelings during bear markets and
become tempted to sell — the exact opposite of what
they should be doing.

So next time the market takes a tumble, remember

this fact from Charles Ellis and load up on shares,
because stocks are on sale and the market will
recover!

12
 The Crash Signal
The One Signal that Predicts a Stock Market Crash

Shortened Link to Book:

linkpony.com/books

Stock market crashes are inevitable, but losing

money doesn't have to be! In this ground breaking
book, Tim Morris exposes the one signal that has
flashed before every stock market crash for the last
60 years. He then goes over a foolproof strategy to
buy-in during the crash, as well as ways to know
when the crash is over. Save yourself from the next
market crash with The Crash Signal!

13
 Tip #4
Most Stocks Rise and Fall With
the Market

A commonly quoted statistic is, “75% of stocks

follow the market.” While the actual percentage may
be slightly higher or lower, it is true that many stocks
follow the market on any given day, and even more
so during periods of increased volatility — money
follows money.

This stat tends to be more important for those

involved in day trading or swing trading, as opposed
to long-term traders. This is because, short-term, you
gain higher odds when using the market as your
trading barometer.

Let's say you are day trading and the markets are
heavily down on the day. You would then want to
either hold off on trading, or stick to shorting stocks
that day, as you know many stocks will follow the
market and go down. The probability of one of the
stocks you're trading that day gaining value is
relatively low. Thus, knowing the fact that most

14
stocks follow the market can help increase your odds
if you choose to do any short-term stock trading.

15
 Tip #5
Markets Rise About 3/4 of the
Year

While there are dips and corrections, in an average

year, the market will rise 9 out of 12 months. What
months will they rise? No one knows! If you've ever
listened to analysts talk about stocks, you'll notice
they're wrong more times than they are right. One
analyst swears the market will go down while
another swears it will up.

You have these two intelligent people, who have

most likely studied the stock market for years, and
their "predictions" on the direction of the market
come true about half the time. In other words, you
would have the same probability flipping a coin.

This brings us to our next rule which is...

16
 Tip #6
Stop Trying to Time the Market

It’s very hard to predict when stocks will rise and

when they will fall. For this reason, with your long-
term portfolio, you want to buy stocks with the
intention of holding them indefinitely. Little dips and
corrections should not shake you out of the market,
as this will cause you to overtrade. Overtrading, as
opposed to a buy-and-hold strategy, will assuredly
lead to a loss in profits.

Are you guilty of overtrading? I know I was! I want

you to perform a quick test. Look at the long-term
profits in your current portfolio, and compare it to the
profits of the S&P 500 over the same time period. If
you’re like most traders, you’ll have far less in gains
versus if you had simple bought the S&P 500,
reinvested your dividends, and held indefinitely. The
reason for this is simple — you’re overtrading and
not holding for the long-term.

Now I’m not saying you need to buy the S&P 500,
it’s just a good benchmark to use to compare how

17
you have performed versus the overall market.

The opposite of overtrading would be undertrading.

This is where you sit on cash indefinitely in an effort
to try and time a market bottom with your funds. You
end up losing with this approach in the long run
because:

1) Cash is trash (inflation eats away at it)

2) You aren’t collecting dividends
3) You cannot time the market

For example, let’s say you thought the market was

too high in 1995 (after its 5 year run) and, for this
reason, you wanted to wait until it “came down a
little” before you started investing. Well, you would
have been waiting another six years before it caved,
ultimately missing the huge bull market run in the
process.

The best approach to invest in the market is via

"dollar cost averaging" What this means is you pick
a short term interval (e.g. every 2 weeks when you get
paid) and, using your new influx of cash, add to the
positions in your long-term portfolio.

This is much more beneficial than sitting on cash

(undertrading) or constantly getting in and out of the
market (overtrading). Both of these tactics share the

18
same approach, in that you’re trying to “time” the
market, leading to a loss in profits over the long-run.

And while you can’t time the exact bottom during a

crash, you can dollar cost average into it. I explain
how to do this in my book The Crash Signal.

19
 How to Trade Options
The Complete Guide for Beginners

Shortened Link to Book:

linkpony.com/books

Are you familiar with stocks but want to learn about

those crazy things called options? Tim has you
covered! In his book How to Trade Options, he
breaks down a complicated subject into easy to
understand segments, while also providing his own
personal insight along the way. When you’re done
reading this book, you’ll have a firm grasp of
options and can start trading them in your own
portfolio. Find out more at the link above!

20
 Tip #7
Over the Long-Term the Stock
Market Significantly Beats
Inflation

When investing in stocks, you have to look at things

over a long-term time horizon. As we know, stocks
have their ups and downs (and even their crashes).
However, even through all this, they significantly
beat inflation over the long run.

Inflation is the little mouse that eats away at your

money every year. It's the reason why a pack of gum
was $0.10 in the 1960s, but costs $1.50 today. It's
why putting your savings under your mattress or into
a bank account isn't a good investment strategy.
There are two primary reasons inflation occurs in the
United States:

1. The Federal Reserve, a private bank

which was put into place in the early 1900's,
has control of our money supply.
Consequently, they are able to print money

21
 at will which devalues the dollar.

2. The United States was taken off the gold

standard by the Nixon administration in the
early 1970's, thus no longer backing the US
dollar by any type of commodity, but
instead the "word" of the government.
Therefore, with the help of the federal
reserve, the government is able to spend
money at will, with nothing tied to the
currency which would control said
spending.

Since the Federal Reserve was put into place in 1913,

the rate of inflation averaged 3.22% annually. This
means something that costs $1 today, will cost about
$1.03 in one year. Knowing this, you need to find a
way to beat this 3.22% figure, and not allow the
money you’ve worked hard for to become devalued
by inflation.

While there are of course many different ways to

invest your money, stocks have proven themselves
throughout American history as one of the best. And
while you have many choices when it comes to
investing in stocks, let's keep things simple. History
shows us that if you were to strictly invest in the S&P
500 over your lifetime, you would significantly beat
inflation by about 6% each year.

22
 How to Invest in the Stock Market
The Complete Guide for Beginners

Shortened Link to Book:

linkpony.com/books

Interested in investing buy don’t know where to

start? Is all the information you find online
overwhelming? Have no fear! In the book How to
Invest in the Stock Market, Tim teaches everything
you need to know to start investing in an easy to
understand format. Find out more at the link above!

23
 Tip #8
The S&P 500 Averages 9.8% a
Year

Going back 95 years, the average return of the S&P

500 has been 9.8% a year (with dividends
reinvested). This would mean strictly investing your
money in the S&P 500 (over a long-term time
horizon) not only beats inflation, but also grows your
wealth.

Do note, this 9.8% yearly figure is an “average.”

Some years the S&P 500 makes more than this, other
years it makes less or even goes negative. The market
can be volatile, and this volatility is what scares
many traders. But volatility is short-term, and as an
investor, you main focus should be what the stock
market will do for you long-term. And as history as
shown, the market will ascend higher over time.

Nonetheless, this knowledge can still be hard to

rationalize when you are losing money in the stock
market. You see those dollars signs in your account
balance going down and you think to yourself, "How

24
low can it go… should I take my money out?"

As stated before, you will never be able to perfectly

time the top or bottom. And when fear takes over,
many investors end up buying high and selling low,
losing a vast amount of money in the process.
However, this wild volatility in a portfolio can be
calmed. In order to do this, you may consider
incorporating bonds into your portfolio.

25
 The Set & Forget Portfolio
A Low Risk Investing Strategy that Averages Over 11% Annually

Shortened Link to Book:

linkpony.com/books

Looking for a low-risk, long-term strategy you can

employ in your stock portfolio? Consider The Set &
Forget Portfolio. This strategy is almost completely
hands-off, requiring just four re-balancing trades per
year. And with an average return of over 11% per
year, it is a great way to grow your wealth and beat
inflation. Find out more at the link above.

26
 Tip #9
Bonds Help to Limit Volatility

As stated in Tip #8, the market can provide incredible

returns for investors. But a portfolio holding strictly
stocks can be rather volatile. And this is where bonds
can be helpful.

Bonds tend to share an inverse relationship with

stocks. Meaning during good times (risk-on),
investors pile into stocks and bond prices tend to
decrease. Conversely, during periods of volatility
(risk-off), investors rush out of stocks and bonds
become a more attractive investment.

While this is not a steadfast rule, as there are times

bonds and stocks move in tandem, this inverse
relationship is common and becomes more apparent
during volatile market conditions.

Financial advisors used to say you should subtract

your age by 100, and that is the amount of stocks you
should have in your portfolio (versus bonds). But
now, with many individuals living much longer, that

27
number has gone up to 120 or even 130.

In other words, let’s say you’re 50 years old. Subtract

your age from 130 and you get the number 80. This
means 80% of your portfolio should be stocks, while
20% should be situated in bonds. Of course this rule
is not an absolute, but instead correlates to an
investor’s degree of risk.

Any time you add bonds into your portfolio, you’re

limiting long-term growth (a con), while benefiting
from decreased volatility (a pro). What this means is
if you can stomach the big drops that occur during
corrections and crashes, you can — and should —
hold a portfolio comprised of strictly stocks (with no
bonds).

Including bonds in your portfolio tends to be more

attractive during retirement, as many will be living
off the income they have saved. Put another way,
retirees can’t afford to lose 50% of their portfolio
during a market crash, a scenario which could take
place with a portfolio comprised of strictly stocks.

And while bonds do appreciate in value over the

long-term, they do not appreciate nearly as much as
stocks, barely keeping up with the rate of inflation
over certain decades.

28
For this reason, it’s up to you whether or not you
want to hold bonds in your portfolio. It ultimately
comes down to how much volatility you can
stomach, and when you’ll need to use the funds in
your account.

If what you hold in your portfolio is keeping you up

at night, you may want to consider including more
bonds to limit the volatility. If you can stomach the
downturns and know you won’t have to touch your
funds for a number of years, leave bonds out.

Bonds can easily be incorporated into a portfolio

using ETFs. The most common bond ETFs would be
TLT (long-term treasury bonds) and BND (total
bond fund). If you are unfamiliar with ETFs, I would
suggest checking out my book How to Invest in the
Stock Market.

29
 The 20% Solution
A Long-Term Investment that Averages 20.13% Per Year

Shortened Link to Book:

linkpony.com/20

You read that right, 20.13% per year! This strategy,

which Tim has coined The 20% Solution, requires
just 4 trades a year. With over 30 years of history of
this strategy in action coincided by charts and
figures, this book backs up its claims! Go to the link
above to find out more now.

30
 Tip #10
Gold is Okay… Not Great

You may often hear ads on the radio (or online)

which state how banks and governments around the
world are hoarding gold and you need to buy gold
right now to protect your money!

Unfortunately, gold has not done that well over the

years, not nearly as well as stocks at least. Here is a
chart of the inflation adjusted return of gold since
1802 in the United States.

31
This chart is from the book Stocks for the Long Run
by Jeremy Siegel. I highly suggest reading this book;
it’s one of the top 3 stock books in my lifetime
library.

As shown in the chart, gold has averaged a return of

just 0.7% a year (after adjusting for inflation).
Compare this to the 6.6% a year (inflation-adjusted)
return of stocks.

Even if we look at when Nixon took the US off the

gold standard in the early 1970’s, gold still hasn’t

32
done too well.

As you can see in the chart above, gold hit an all-time

(inflation-adjusted) high of around $2,500 in 1980.
As of writing this book in 2022, gold has still not
surpassed this high.

With all this being said, a small allocation towards

gold in a portfolio can still be advantageous. Gold
tends to be beneficial during two scenarios:

1. During times of low interest-rates. This is

because gold, which pays no dividends or
interest, will appreciate more than low
paying bonds.

2. During times of high inflation. This is

because gold is considered an “inflation
hedge,” as its price usually keeps up with

33
 or beats inflation.

This indicates there are times when stocks and/or

bonds decline in value, yet gold rallies and moves
higher. As such, allocating 5% of your portfolio
towards gold is one of the many ways you can
alleviate these market declines and diversify your
portfolio.

In modern times, many investors are calling Bitcoin

“digital gold.” This is because Bitcoin has many of
the same valuable properties as gold, as well as
additional properties which gold does not offer.
Despite this, Bitcoin has not yet truly proven itself as
“digital gold,” instead currently appearing to move
in tandem with tech stocks.

I happen to invest in both Bitcoin and gold, but it is

of course a personal preference whether an investor
wants to have gold, Bitcoin, or both in their portfolio.
My suggestion would be to place a max of 5%-10%
of either in your portfolio.

34
 Bitcoin Explosion
Why the Price of Bitcoin Will Soon Skyrocket

Shortened Link to Book:

linkpony.com/books

Bitcoin has become such a prominent topic in recent

years, and there are good reasons why! In this FREE
book, Tim Morris explains how Bitcoin works, the
many reasons it’s so beneficial as a store of wealth,
and why it’s price will continue to increase far into
the future. Find out more at the link above.

35
 Tip #11
Diversifying is Key

In the early 2000’s, Lehman Brothers was the 4th

largest bank in the United States, having over 26,000
employees and $639 billion in assets. Founded in
1850 and operational for over 150 years, business
was booming and revenue was soaring. But in 2008,
almost overnight, Lehman Brothers went bankrupt
and its stock became worthless.

Many of Lehman Brothers’ employees, as well as

many private investors, had a large portion (or even
all) of their retirement savings in the company stock.
And without warning, their life savings’ disappeared.

While this is an extreme example, it is far from the

only case. Enron, Blockbuster, Radioshack,
Pets.com, and many other reputable companies have
gone under before there was enough time to know the
ship was sinking. Examples like these prove that you
should never place all your eggs in one basket, and
demonstrates why diversifying your portfolio is key
to preserving your wealth.

36
And it’s not just companies that can be affected, but
entire market sectors as well. In 2000, it was tech
stocks that got hit hard. In 2008, it was the financial
sector. In 2020 it was the travel companies. Even if
you diversified into many different financial
institutions in 2008, you’re entire portfolio would
have been wrecked because the sector as a whole
took so much damage.

And this is why investing in ETFs is so much more

beneficial than choosing individual stocks. Many
ETFs are composed of hundreds or even thousands
of different stocks which make up varying sectors of
the market. For example, the Vanguard Total Stock
Market ETF (VTI) is composed of 4112 small, mid,
and large cap stocks which vary across many
different sectors of the market. If one stock in this
ETF were to go under, or even an entire sector, it
would still hold much of its weight considering so
many other companies comprise the ETF.

But you don’t have to stop there! You can also invest
in gold, commodities, businesses, real estate, etc.
You ultimately want to have your money spread
across many different sectors and assets to get the
maximum benefit from diversification.

In the upcoming edition of my book The Set &

37
Forget Portfolio, I will show you how to do just that,
crafting a well-diversified portfolio across many
different sectors of the market. And considering you
are reading this report, you are on my email list and
will be the first to know when it is released in the
coming weeks… stay tuned.

38
 Tip #12
Most Hedge Funds Do Not Beat
the Market

Some investors manage their own portfolio, some

use financial advisors, but others decide to invest
with hedge funds. Hedge funds could be compared to
financial advisors, except reserved for the wealthy
and elite, as most require a minimum deposit of
$100,000-$1,000,000 to enter their “club.” Because
such a hefty initial deposit is required, many hedge
funds are managing millions or even billions of
dollars in capital.

With so much money coming in, hedge funds are

able to pay extraordinary salaries. This then attracts
the best and the brightest stock traders in the
industry, many with degrees from Ivy League
schools, to manage all these funds.

With all this taken into account, a well-known fact is

most hedge funds do not beat the market. While there
are years (or a period of years) where some hedge
funds have stellar returns, over the long-run, the

39
majority of hedge funds fail to beat the returns of the
S&P 500.

Here is a chart from TipRanks.com (a website which

tracks hedge funds), showing the average returns of
hedge funds versus the S&P 500 from 2012 to 2022.
Note that the purple line is the return of the S&P 500,
while the orange line is the average return of hedge
funds.

As shown in the chart above, from 2012-2022, the

S&P 500 gained about 253%, while hedge funds
delivered just 93% in profits. And while this is just a
small snippet of history, the same pattern has played
out over a much longer time period, going back

40
decades.

This signifies the most intelligent and gifted

individuals, managing billions of dollars worth of
their clients’ wealth, cannot formulate portfolios
which are able to consistently beat the market. And
this chart doesn’t even calculate the management
fees which hedge funds charge clients, usually
amounting to about 2% a year.

What does this mean? Well, if the world’s best and

brightest investors cannot consistently beat the
average return of the overall market, it would be in
your best interest to not try either!

While this may surprise many, the facts outlined here

prove you're better off investing in a safe, diversified
portfolio that incorporates the overall market (e.g.
S&P 500), rather than trying to make your own
portfolio using individual stocks. Nevertheless,
many investors think they know more than the
market, which leads us to our next rule.

41
 Tip #13
Technical and Fundamental
Analysis Don’t Really Work

This may come as a shock to many, but hear me out

before you yell at me. In modern times, neither
technical nor fundamental analysis work as they are
intended to, and you will not beat the market using
them.

Let’s start with fundamental analysis. Many years

ago, in the days of Benjamin Graham (Warren
Buffet’s mentor), fundamental analysis may have
been beneficial. Information moved much more
slowly at this time, as the internet and cellular
telephones had not been invented yet.

For this reason, you may have been able to find high
value companies which traded at low prices before
anyone else did. Then, when the masses eventually
found the company you had already bought, you
profited handsomely on your investment.

In today’s world, information moves at the speed of

42
light. By the time you’ve found a possible “high
value” company, hundreds (or thousands) of other
people have gotten to it before you have.

Not only this, there were far fewer mutual funds,

hedge funds, and professional traders many years ago
— meaning you had less competition. Nowadays,
there are thousands of institutions and money
managers with the sole intent of finding profitable,
high value stocks. Many of these professionals use
computer algorithms which tracks information down
to the millisecond. So to think you, as an everyday
investor, can somehow beat thousands of
professional intuitions in today’s world is ultimately
wishful thinking.

Technical analysis is a different story. Much of

technical analysis is more or less horse poop, and
many studies confirm it has never worked as a viable
trading method. Economists view technical analysis
as the “astrology” of the stock market, and that’s
truly what it is.

Confirmation bias and data snooping is what drives

investors to believe in technical analysis. They see a
stock had a double top or a head and shoulders
pattern in the past, and view this as proof these
patterns work. But what they fail to uncover is the
many failed patterns that didn’t come to fruition in

43
the same chart.

Technical analysis patterns are random events which

occur in charts, and they are not unique to the stock
market. These patterns occur in charts which track
baby birth trends, car sales, social media users, and a
variety of others.

The image on the next page is from the book Stocks

for the Long Run by Jeremy Siegel.

44
Four of the figures were randomly generated from a
computer program, while the other four are showing
the Dow Jones Industrial Average during different
periods. Before moving further, try to determine
which four above were randomly made by a
computer.

45
The true charts are B, D, E, H and the fake charts are
A, C, F, G.

The technical analysis theory states these patterns are

supposed to be based on a war between buyers and
sellers, yet this obviously is not applicable to a chart
randomly generated by a computer, or a chart which
shows how many babies were born in North America
in the last one hundred years. Yet all of these charts
show patterns such as double tops, bull flags, head
and shoulders, etc.

You may be thinking, “I don’t believe you Tim. Many

professionals have successfully used fundamental
and technical analysis to make their wealth.”

While this may seem plausible based on what is

shown in the media, it is not actually the case. While
it is true many traders and institutions do use these
methods in an effort to beat the market, what is being
questioned is whether or not these methods actually
work.

Remember the hedge funds we talked about before?

These institutions, containing the best and brightest
traders, use various forms of both technical and
fundamental analysis. And yet, even being experts in
these subjects, they still come up short of beating the
market over the long-run.

46
This fact should really hammer home why trying to
beat the market using fundamental or technical
analysis becomes a loser’s game. While you may get
lucky sometimes, you won’t beat the market in the
long-run. Don’t fight the market, use it to your
advantage.

47
Technical Analysis is Mostly Bullshit
Why Flipping a Coin is a Better Strategy than Technical Analysis

Shortened Link to Book:

linkpony.com/books

Have those lines you drew on your chart gotten you

nowhere? Are you confused why your RSI indicator
isn’t working? Why did your stock keep going up
after it broke its Bollinger band? The reason why
is… technical analysis is mostly bullshit! In this book
Tim dives deep into technical analysis and fully
explains why so many still believe in the astrology of
the markets. Stop wasting your money drawing
patterns and learn the truth today!

48
 Tip #14
90% of Traders Don't Profit in the
Stock Market

This is a sad fact no one talks about... most traders

lose money! All over the internet you see investment
“educators” and traders in chat rooms lambasting
about how much money they make and how easy
trading is. As you already know, trading isn’t easy
and what no one talks about is how much money they
actually lose in the stock market.

Trading, especially speculative types of trading (e.g.

penny stocks), is not easy! It's a skill that can take
many years to master, of which of course many
people never master. The issue most people have is
they see all this money being made in the stock
market and want to get in on the action. But they
don't want to be rich in 30 years, or 20 years, or 10
years... they want to be rich right now!

As such, they start day trading, swing trading, trading

options, all in the hope they can make vast wealth.
But, consequently, they end up losing a lot of money

49
in the process. My own father lost $500,000 in the
stock market with this flawed outlook.

Admittingly, even I got wrapped out in these

strategies in the beginning of my investing career
(and lost a lot of money in the process).

There's a little known statistic that brokerages don't

mention when you sign up for their platform, and it
is known as the 90/90/90 stat:

90% of traders lose 90% of their

account balance within 90 days of
opening a stock trading account

This statistic is pretty scary, but it's true! Many

people, frustrated after losing so much money, quit
stocks, say they are stupid, and vow to never trade
again. People want to be rich right now! They don't
want to make safe, long-term returns, and thus, greed
ends up bleeding their account dry.

Using history as our guide, the stock market can be

an excellent vehicle to make money if it is used
correctly. And this would mean using it as a long-
term investment vehicle. Investors should be looking
10 or 20 or 30 years down the road when they start
investing in stocks. And obviously the earlier
someone starts investing, the better, as money
quickly compounds itself.

50
Now I’m not proposing that no one makes money
with other investing strategies. There are day traders,
swing traders, forex traders, etc., and some people do
well with these strategies. However these people are
very few and far between. Not only this, considering
the complexities of the market, it takes these traders
many years to be able to perfect their strategies. They
have developed their own systems through hard work
and research, meaning it is highly unlikely they will
share their secrets with others.

I want you to think about something. Let's say you've

been working hard mining a plot of land for many
years and, after much hard work, you end up
discovering a huge pile of gold which could make
you rich. Would you tell people about it? Would you
set up a website and charge people a few dollars to
show them where this pile of gold was? Most likely
not. Most likely you would just keep this pile of gold
all for yourself.

Well, imagine this same scenario with online

educators who claim they became a millionaire
overnight with $3 in their bank account, and now are
eager to explain exactly how you can do it too!
Because of greed, some individuals will believe
these “educators.” But, as you may have already
realized, these charlatans are just selling dreams, not

51
actual advice, and they will gladly take all your
money in the process.

The moral here is to be very skeptical of online

educators, especially those in the investment
industry. If something seems too good to be true, it
probably is.

If you do end up deciding you want to try speculative

trading strategies, such as day trading or swing
trading, I highly suggest you use a practice account
first. This will allow you to perfect your strategy,
make sure it works, at which point you can then
deploy your real money. It takes time to find ways to
perfect a strategy and make it profitable.

An excellent broker that has a practice account is

called TC2000 (linkpony.com/tc2000). This broker
has a charting software which allows you to perform
a variety of scans, use indicators, as well as trade
right from the charts. The practice account starts you
out with $100,000 in paper money. Use the link
above to find out more about the software and
receive a discount on your order.

52
 How to Beat the Market
A Long-Term Investment Strategy that Beats the S&P 500

Shortened Link to Book:

linkpony.com/beat

A little known research paper was released 30 years

ago which demonstrated a way traders could actually
beat the market. The technique did not rely on
commonly used tools such as fundamental or
technical analysis, but instead focused on trader
psychology. With close to 100 years of data to back
up the claims, you will be pleasantly surprised with
Tim’s new book How to Beat the Market. Find out
more at the link above.

53
 Tip #15
Trading With Margin is Typically
a Bad Idea

Many brokers offer investors margin. This basically

means they will lend a trader money for a small
yearly fee (e.g. 4%). At first glance this may seem
wonderful. You can use the broker’s money to make
more money, thus multiplying your gains. But hold
on there cowboy — this also means you can multiply
your losses. And in this scenario, you can lose more
money than you even have, leading to a margin-call
in the process.

A margin-call is when, after your account goes

negative, your brokers sells a portion of your stocks,
or even all your stocks, to obtain the money that you
owe. Let me tell you a quick story of a big mistake I
made in the beginning of my career where I received
a margin-call from my broker.

I used to employ a strategy which involved shorting

stocks. As you may already know, shorting involves
selling a stock first, thus making money when the

54
stock goes down. A unique risk when shorting is
there is no limit to how high a stock can go up.
Meaning you could potentially lose more money than
you originally invested. This is of course much
different from simply buying a stock, which can only
go down to $0.

My (very speculative) strategy involved shorting

stocks which, over the long-term, had steadily
declined. It seemed like a good strategy at first, and
I actually did well for a number of months employing
it. One stock which had been steadily declining,
which we'll call stock XYZ, dropped to $1.50 and I
decided to short it.

Soon, the stock rose to $2. Looking at the long-term

chart and thinking this was just a quick spike in the
price, I ended up using the extra “margin” in my
account to short more of this stock. Over the next two
weeks the stock ended up rising above $3, more than
doubling my original short position of $1.50. This
meant I now had lost more than the $10,000 I had
originally invested.

As the stock continued to rise in price, I continued to

lose money on the trade. Because I did not have
enough money in my account to cover my losses, I
ended up getting margin-called. All the stocks in my
account were sold, which in turn covered the

55
expenses I owed on my failed short position.

Looking back, I realize how naïve and reckless I was

employing this strategy. But I learned an important
lesson, and that was borrowing money to invest in
stocks is not a good idea.

While this would have been considering a more

speculative type of trade, even long-term investors
are not immune to a margin-call. Stocks correct, they
crash, they have dips, and sometimes these declines
can be rapid and sudden. Examples include Black
Monday in 1987 and the Flash Crash in 2010.

If you have borrowed too much money from your

broker and one of these events occurs, a margin-call
could quite literally wipe out your account. I’ve
heard mixed opinions from professionals regarding
using margin in safer, long-term portfolios. However
as of right now, my opinion is to abstain from
borrowing money from your broker for any type of
trading strategy, including long-term investments.

56
 Tip #16
Dividend Stocks Are Best During
Retirement

Dividend stocks are excellent additions to your

portfolio as they essentially provide “guaranteed”
income that is paid to you each quarter. And with
some dividend stocks paying 3% or 4% a year, this
can really add up.

Having said that, higher paying dividend stocks

don’t tend to do as well as the overall market over the
long-run. Meaning, if you are not near retirement
age, it is a better idea to invest in the overall market
(e.g. S&P 500) and reap the larger gains it provides,
then shifting to higher paying dividend stocks when
you retire.

Many stocks pay a dividend, including ETFs which

track the S&P 500 (e.g. SPY). So before retirement,
you should use the DRIP that is available with your
broker. DRIP stands for dividend reinvestment plan.
This is where, instead of the dividend money being
sent to your account balance each quarter, it is

57
reinvested automatically into whichever stock or
ETF is paying out the dividend. This leads to
compounding interest, thus growing your returns at a
more rapid rate. It’s essentially a hands-off process
where your broker automatically buys more stock for
you each quarter.

After you have a nice sized nest egg saved up and

you plan to retire, this is a better time to start
transferring your funds into high paying dividend
stocks. The reason for this is, depending on how
much money you have saved, you can potentially
live off these dividend payments during retirement.

When retired, many financial advisors state you can

comfortably withdraw up to 4% of your portfolio
each year. And by following this rule, you give
yourself the best chance of not outliving your money
during your retirement years.

Well, if you’re retired and have a portfolio full of

dividend paying stocks, you may not have to touch
any of your capital, as the dividends may provide
enough income for all your expenses.

For example, let’s say you are able to save $2 million

dollars in your 401K or personal brokerage account
by the time you hit 68, at which point you decide to
retire. And by this time, all your funds are placed into

58
dividend paying ETFs which yield an average of 4%
a year. Not only will your capital appreciate (as
you’re invested in stocks), but you’ll also receive
$80,000 a year to live on with the dividend checks
that are paid to you each quarter. And considering
you’ll likely have your major expenses paid off (e.g.
house, car) by the time you’re retired, there will be
fewer expenses in which you need to account for.

Add these dividends to the social security checks you

receive from the government, as well as a possible
pension plan from your employer, and you’re sitting
on a great deal of cash you can comfortably live off
of during retirement. And with the capital still
appreciating in stocks, you’ll have plenty to give to
your heirs or to withdraw should it become
necessary.

59
 Dividend Investing for Everyone
A Guide to Building Wealth Through Dividend Stocks

Shortened Link to Book:

linkpony.com/books

Want to learn more about dividends but don’t know

where to start? Now you can with Tim’s new book,
Dividend Investing for Everyone. In this book Tim
provides a detailed overview of the many different
dividend options available, both in and out of the
stock market. He then goes over the benefits of each,
ultimately showing you how to set-up the ideal
portfolio to make the most from your dividend
stocks. Find out more at the link above!

60
 Tip #17
90% Investing / 10% Speculating

It’s fun to day trade, swing trade, option trade, etc.

Ultimately though, short term trading is equivalent to
gambling. Trying to pick the short term direction of
a stock is hard, and it ends up being where most
investors lose money.

For this reason, I have formulated a rule, one which

I use in my own portfolio, which should keep you
grounded. I have named it the “90/10” rule, and it
involves investing 90% of the money in your
portfolio in a safe, diversified basket of ETFs, while
allowing yourself to use the remaining 10% for more
speculative, risky trades.

Now don’t get me wrong, you can make money with

short term strategies, but you can also lose money (as
you may already be aware). Your main focus with
stocks should be long-term investments. This is how
you actually obtain wealth in the stock market, and
how the world’s best investors have made their
riches. And this is why the majority of your money

61
should sit in long-term investments. If you stick to
the 90/10 rule, you will thank yourself!

62
 Tip #18
Never Stop Learning

The stock market contains a lot of information, and

you could truly spend an entire lifetime learning
everything. With that said, even if you find you are
doing well as an investor, make sure to continue
learning! You don’t know what you don’t know. By
furthering your studies, you’ll continue to come
across information that will enhance your knowledge
and make you an even more profitable investor.

There are great programs you can follow to learn

more about the stock market. CNBC has a
podcast/TV show called “Fast Money.” Jim Cramer
has a podcast/TV show called “Mad Money.” Both
of these are available to listen to for free on Spotify
and the iHeartRadio app. (Note: The people running
these programs do not have to display a “track
record.” And like the “professional” educators I
mentioned before, they are wrong more times than
they are right. So take their “stock suggestions” with
a grain of salt. The main premise of listening to these
programs is just to learn more about the market).

63
The Wall Street Journal is an excellent publication to
read about the markets and is available in paper,
digital, and Kindle format.

There are also many great books available which

relate to the stock market, with my all time favorites
being A Random Walk Down Wall Street by Burton
Malkiel and Stocks for the Long Run by Jeremy
Siegel.

Using these sources of information, as well as others

you may find, will allow you to continue advancing
your knowledge to become a better investor.

I also provide coaching on my website. For a small

fee, I will sit down with you for a one hour phone
call. During this call we will go over how the stock
market operates, my philosophy on the market, and
then sculpt a long-term portfolio based on your
income and investment goals. You can find out more
about my coaching sessions at linkpony.com/coach.

64
 Final Thoughts

I hope I was able to provide you with information

that made you rethink your investment and trading
strategies in the stock market. History has shown the
stock market is an excellent way to beat inflation,
make money, and save for retirement, but it has to be
used in the right way.

Your main focus when investing should be long-term

investments, comprised of a diversified portfolio,
which uses the general market as its backbone.
Speculative trading is fine, but stick to using less than
10% of your portfolio if you choose to partake in it.

Feel free to email me at [email protected]

with any questions you have. Take care!

65