Expert Warns: Simple Cash Strategy Could Save Your Money From 50% Market Drop

A veteran trader with 25 years of experience is warning investors about a potential 50% market decline and sharing a simple strategy that most financial advisors will never mention.

Steve Burns, who runs a trading education platform and has written over 25 books, says there's one powerful move that could protect your money: going to cash (selling your investments and holding money instead). "You will never hear a financial expert tell you to go to cash," Burns explains. Why? Because advisors only make money when you're invested - not when your money is sitting safely in cash.

Burns suggests using the 200-day moving average (the average stock price over 200 days) as a simple signal: • When the S&P 500 index falls below this line - sell and go to cash • When it rises back above - buy back in • This strategy has historically beaten "buy and hold" investing

The Deadly Mistake: Averaging Down

Burns warns against "averaging down" - buying more shares as a stock falls. "A stock looks like a bargain at $100, so it feels like a great deal at $75," he says. But most individual stocks never recover. Only major indexes (collections of many stocks) reliably bounce back because they always include the current winners.

His advice? If you must average down, only do it with index funds (funds that track many stocks), never with individual company stocks.

The Bottom Line

Burns learned these lessons the hard way after losing money in the 2002 market crash. Now he only invests during clear uptrends and keeps his money in cash the rest of the time. With many experts predicting tough times ahead, his simple cash strategy might be worth considering - even if your financial advisor never mentions it.

This is an AI-generated summary. Read the original article at: https://www.marketwatch.com/story/this-bear-market-signal-wall-street-ignores-is-putting-your-money-at-risk-right-now-46f1fcf3?mod=mw_rss_topstories