Target’s recent crash is a huge buying opportunity

From Dr. Steve Sjuggerud, Editor, True Wealth Systems:

Target (TGT) recently fell 16% in a month…

Investing after a major fall is usually a bad idea… But this is a case where you should consider it.

Target’s history shows that buying after this kind of decline is a good idea. And it could actually lead to gains of 29% over the next year.

Let us explain…

Target is a retail giant with a market cap of $30 billion.

It’s been a steady winner in its space for decades. So a 16% fall in a month is nothing to brush off. It’s a major correction. Take a look…

This chart is not pretty… but the recent 16% one-month fall led to a rare extreme.

This has only happened 2% of the time since 2000. But similar falls have happened near turnaround points for the company in the past.

In fact, Target shares moved higher 80% of the time a year after all of these extremes. Those returns crushed buy-and-hold returns as well. The table below shows them…

table

Target’s typical buy-and-hold return since 2000 isn’t impressive – just 3% a year. But buying after Target has fallen 15% or more in a month was a fantastic strategy.

Buying after similar extremes led to 5.6% gains in three months, 18% gains in six months, and a massive 28.9% gain over the following year.

And again, this extreme has led to positive gains 80% of the time a year later.

Now we aren’t officially recommending shares of Target today. This isn’t the kind of investment we look for in True Wealth Systems (TWS).

However, history says it’s not time to sell shares… It’s actually a good time to consider buying them.

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