Is This Popular Retail Strategy Now Dead?

Wealth Whisperer Team

Crypto-friendly bank Silvergate Capital (NYSE: SI) failed faster than Biden’s mental acuity.

Unfortunately, it was only the first domino.

Shares of regional banks like First Republic Bank San Francisco (NYSE: FRC), PacWest Bankcorp (NASDAQ: PACW) and Signature Bank (NASDAQ: SBNY) disintegrated right in front of shareholders’ eyes.

It was a good old-fashioned run on the banks not seen since the Great Depression.

On Friday, we witnessed the collapse of SVB Financial Group (NASDAQ: SIVB), as California regulators closed the bank and the Federal Deposit Insurance Corporation (FDIC) stepped in.

Good thing we had those stress tests created by Dodd-Frank to prevent this type of thing from happening!

The worst part is the number of traders and investors who stepped into the stock as it cratered.

They assumed that a technical strategy that’s worked for years would create a violent rebound in shares.

Unfortunately, the Fed has gaslit so many individuals into a false sense of security that this risky idea seemed reasonable.

That’s why you must IMMEDIATELY take steps to protect your assets and retirement.

That starts with watching this video by renowned retirement expert, Bob Carlson.

Bob lays out the perils that lurk ahead and the steps YOU can take to avoid them.

Once you’ve listened to what he has to say, you’ll understand why the popular retail strategy we’re about to unveil is more dangerous than almost anyone realizes.

Is Retail’s Favorite Strategy Dead?

The latest bloodbath in regional banks could cause a monumental shift in how retail traders play the game.

You see, Silvergate Capital is the most shorted stock in the market. 76.9% of the floating shares are short, according to MarketWatch data.

Buying stocks with high-short interest in hopes of a “squeeze” has been one of the most popular retail trading strategies over the last three years. 

All thanks to some incredible moves by stocks like GameStop (NYSE: GME), AMC Entertainment (NYSE: AMC) and Bed Bath & Beyond (NYSE: BBY) in 2020 and 2021.

But is that game dead now, with interest rates sky-high and free money no longer available?

We think so.

The idea of blindly buying a stock because it is heavily shorted no longer makes sense.

In the case of Silvergate, the shorts were absolutely right.

And over time, they are usually right, too.

After all, GME is down 86% from its January 2021 highs, and AMC is down 88% from its June 2021 highs.

Retail traders thought they were sticking it to the hedge funds on Wall Street, but in the end, the smart money always wins.

The Smart Way To Take Risky Bets

In a volatile and crazy market, diversification is your friend. Putting your hopes on one or two stocks alone is a disaster waiting to happen.

For example, we all know that artificial intelligence (AI) technology is experiencing explosive growth. However, can we really tell who the ultimate winner will be?

Instead of placing one or two bets, Jim Woods of Fast Money Alert believes you can have your cake and eat it too.

For example, one of his latest ideas for playing the upcoming AI surge is Global X Artificial Intelligence & Technology ETF (AIQ). The fund has an average weighted market cap of $319 billion and an average spread of 0.75%. It currently has a 1.04% dividend yield and 79 holdings.

Among the top holdings and weighting of the fund’s portfolio are Tesla (NASDAQ: TSLA), 3.88%; Meta Platforms Inc. (META), 3.82%; NVIDIA Corp. (NVDA), 3.60%; Salesforce Inc. (CRM), 3.49% and Apple Inc. (AAPL), 3.19%.

It’s hard to miss when you have a basket of quality stocks.

How Savvy Investors Build Portfolios

We’ve learned from the latest regional bank sell-off that the market sells first and asks questions later.

Despite the heavy selling pressure last Thursday and Friday, the big banking boys, like JPMorgan Chase (NYSE: JPM) and Bank of America (NYSE: BAC), traded higher.

What does that mean for us?

You want to be in best-of-breed stocks during extremely volatile and uncertain market conditions.

And buy on weakness.

That’s how Fast Money Alert subscribers capitalized on Tesla (TSLA) in early January. A month later, they had a chance to realize gains of 424.75% on TSLA call options, thanks to a brilliant play by Jim and Mark Skousen.

Another best-of-breed stock that Mark Skousen likes right now is Deere & Company (DE). He lays out his thesis and outlook in his Five Star Trader trading alert.

Have More Than One Gear

Not only is it smart to diversify your portfolio, but it also makes sense to diversify your risk.

For example, you should have some conservative investments that are bringing in cash.

If you need ideas there, Bryan Perry has one right now that will give you a jaw-dropping 25% annual yield! 

Another strategy is to mix it up.

As we mentioned earlier, there’s a reason why “the smart money” shorts lousy companies. You can still be a bull and bet against crappy companies.

That’s exactly what Jim Woods does in his High-Velocity Options service. Last month he bought May $12.50 puts in Affirm Holdings (NASDAQ: AFRM), which are now deep in-the-money.

This latest sell-off in regional banks should be your wake-up call.

It’s time to do an inventory of your investments.

If you need to protect your retirement assets, then we urge you to listen to Bob Carlson’s latest message. 

Getting ahead in this market will be a challenge. But our experts are committed to helping you achieve your goals.

Stay vigilant.

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Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

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Bryan Perry

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Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
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Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

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Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

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