DO. NOT. SELL.

Your decisions in a market like this can impact your retirement trajectory for the rest of your life.

Normally, short-term moves in your portfolio don’t matter all that much.

But we’re not in normal times. Lately, we’ve seen months — even years — worth of market volatility compressed into days.

Panic now, and you could set yourself back decades.

So yes, my first and most important piece of advice is this: hold tight. Now, I know what you might be thinking…

“It’s easy to say don’t sell. But what SHOULD I do?”

I’ll get to that in a second. But first, understand this…

The selloff we’re living through isn’t just a threat; it’s also an opportunity — one that only happens once every five years, on average.

In a market like this, you have a rare chance to upgrade your portfolio by swapping out low-quality stocks for world-class companies trading at deep discounts.

Allow me to explain.

When Stocks Are Down, Trade Up

Take a look at this graph that I shared on X the other day.

It shows that if you missed out on being fully invested for the best one-day moves in the stock market over the last 30 years, your returns would be one-sixth of what they could have been.

The tricky part is that almost every one of those big one-day moves happened during stock market selloffs.

Now, I understand the temptation to sell and avoid more downside is overwhelming. But it can ruin your financial future — do not make this fatal mistake.

These types of selloffs only happen roughly once every five years. And they present an opportunity to not only preserve your financial future but also magnify it…

Without adding any more risk to your portfolio. In fact, you will actually reduce the risk of your portfolio.

This is literally a win-win in the stock market!

So how do you do it? The strategy is to upgrade your holdings.

During a bull market, most stocks get more expensive. The best businesses trade to very high valuations.

Many stocks also become overbought, leaving them vulnerable to corrections. This is exactly what is happening in the stock market right now.

Bull markets are also periods of stability, which means you can take on more risk.

As long as stocks are trending higher, buying lower quality and more leveraged companies makes a lot of sense and can produce great reward.

The right combination of high-quality companies and riskier positions can create a portfolio that will excel in a bull market.

But when the market corrects, the equation changes. Lower-quality companies go from some of the best trades in your portfolio to some of the riskiest.

Meanwhile, some of the best companies in the world trade to valuation levels that we might never see again.

Here’s a real-world example that’s playing out right now.

Ditch the Speculative Trades…

Many investors began to speculate in the quantum computing space in the last six months. The potential for this revolutionary evolution in technology drove huge investor interest.

The result was that the shares of a number of small quantum computing companies began to soar.

Here is the stock chart of one of them, Rigetti Computing Inc. (RGTI).

Investors who intelligently speculated in this company made massive returns.

Buying shares when the stock first broke out back in December would have led to investors doubling or even tripling their money.

This is the right kind of move to make in a bull market.

Continuing to hold this kind of stock, though, is exactly the wrong move to make once we enter a period of heightened volatility.

Here is the problem for RGTI. While there is tremendous promise, there are no revenues or profits. Here is a table showing those metrics.

The company has lost $230 million in the last three years and is expected to lose over $100 million more in the next three years.

They have $192 million in cash on the balance sheet, not a lot of margin for error.

The stock was trading at less than $1 six months ago, and there is no reason it won’t trade back there in a bear market.

… And Bet on Quality Instead

If you have followed the quantum computing story at all, you will remember which company kicked off the speculative frenzy.

It was one of the biggest companies in the world: Alphabet (GOOG), or as we know it, Google.

It was their announcement about their quantum chip called Willow that set off the rally in early December.

GOOG is one of the members of the vaunted Magnificent Seven technology stocks that led the market higher in 2024.

Like its peers, the stock became quite overbought and expensive. The recent correction, though, has fixed that.

Here is the chart of the stock along with my favorite technical analysis indicator, the relative strength index (or RSI).

The stock has sold off 25% in just a few months.

It has also become deeply oversold and is trading at levels where it is almost always higher 90 days later. Going out a few years, it has always been higher.

GOOG is also exceptionally profitable. They do over $100 billion of cash flow per year and have almost $100 billion (!) of CASH on the balance sheet.

The best part? At the current level, GOOG is trading at a 15x price-to-earnings ratio.

Not only is this much cheaper than the overall stock market, but it is also cheaper than the long-term average of the S&P 500.

This is for a company that will grow at almost double the rest of the market.

Owning RGTI during the bull market was an intelligent speculation. But now that the bull market is over, it’s a reckless decision.

Especially when you can upgrade your portfolio by buying some of the best companies in the world at all-time low valuations.

The choice is yours: keep holding risky, overhyped stocks that are now landmines… or upgrade to world-class businesses trading at historic discounts.

As I said earlier, this kind of opportunity only shows up once every five years — if you're lucky.

You won’t get this window again soon. Don’t waste it.