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George Grumbacher Interviews Bob Bacarella

Money Savage

by George Grombacher | Embracing Market Corrections

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Current Stock Market Dynamics

Podcast: Monetta’s Bob Bacarella discusses market corrections with Money Savage host George Grombacher

December 10, 2018

In a recent interview with George Grombacher on his “Money Savage” podcast, Bob Bacarella, Founder and President of Monetta Financial Services discussed his investment strategy and views on embracing market corrections as opportunities rather than time for panic.

Of his approach to investing, Bob said people should be concentrating on the large-cap growth area, which is very defined and composed of large, established companies that people can relate to. Referencing Peter Lynch and Warren Buffet, Bob recommended focusing on what you know and buying disruptive companies that have a competitive edge.

Bob applies this approach in the Monetta Core Growth Fund, which combines both active and passive investing. When the markets plummet, the half of the fund in index serves as ballast. Typically, the disruptive growth stocks correct significantly more than the market during a pullback, creating an opportunity to buy. “We don’t shy away from the market corrections. We buy premium growth companies on sale, shifting the portfolio from the ballast,” he said.

Bob equated this strategy to flying a plane. For much of the flight, the pilot has the plane in autopilot—that’s passive investing. But for take-off, landing, and times of turbulence, the pilot needs to get involved. That’s when active management comes into play.

With regard to those times of turbulence, Bob stressed that they should be considered “sales” or opportunities to accumulate premium-growth companies while they’re selling at discount. “Don’t panic,” he said, “Most downturns in the market are temporary – over the long term, the market has an upward bias.”

Bob explained that it’s essential to maintain a long-term strategy and not attempt to time the market. “Don’t shift to defensive, because you’ll miss the advance. The average market correction is only 71 days. If you’re not in the market when the rebound starts, you’ve missed it.”

Where to begin? “The first thing everyone needs to do is start an investment account,” Bob said. Most people have less than $10,000 available to invest. So what should you do? “It’s okay to start small. Become diversified. Buy an index fund for broad market exposure and add to that base consistently.” George and Bob agree on the importance of dollar-cost averaging. Adding funds to your account on a steady basis, especially during corrections, allows investments to accumulate over the long-term.

Later in the interview, George asked Bob about his “difference-making tip.”

For Bob, it’s taking advantage of the educational component of Monetta’s funds. “We have a wealth of financial education resources, and we’ve partnered with a program called SAGE Tuition Rewards to help pay for college tuition. Through this program, one year of college tuition at over 370 schools can be earned at no cost.”

“And lastly,” Bob said, “Take advantage of market corrections!”

To listen to the full 19-minute “Money Savage” interview with Bob Bacarella and George Grombacher, [click here or other instruction for reader].

To listen to the full 19-minute audio recording, click here.

Monetta Fund Holdings
Monetta Core Growth Fund Holdings

Monetta Financial Services, Inc. | 1776-A S. Naperville Road, Suite 100, Wheaton, IL 60189 | Phone: 630-462-9800 | Email: info@monetta.com

Please read the Prospectus carefully before you invest. It contains more complete information about the Monetta Funds, including risks specific to each fund, fees and expenses. A free, hard-copy of the prospectus can be obtained by calling 1-800-241-9772.

FAANG is an acronym for the market’s five most popular and best-performing tech stocks, namely Facebook, Apple, Amazon, Netflix and Alphabet’s Google.

Opinions expressed are subject to change at any time, are not guaranteed, and should not be considered investment advice.

Within the Chuck Jaffe audio transcript, Bob Bacarella expresses his belief that the educational component is second to none.

Portfolio holdings and composition are subject to change at any time and are not a recommendation to buy or sell any securities.

Mutual fund investing involves risk. Principal loss is possible. The Funds may make short-term investments, without limitation, for defensive purposes, which investments may provide lower returns than other types of investments. The portion of the Monetta Core Growth Fund that invests in underlying ETF’s that track the Index will be subject to certain risks which are unique to tracking the Index. By investing in ETF’s, you will indirectly bear your share of any fees and expenses charged by the underlying funds, in addition to indirectly bearing the principal risks of the funds. Growth-oriented funds may under-perform when growth stocks are out of favor. Please refer to the prospectus for further details. While the funds are no-load, management and other expenses still apply.

Earnings growth is not representative of the Fund’s future performance.

Price-to-Earnings (P/E) is calculated by dividing the current price of a stock by the company’s trailing 12 months’ earnings per share.

Lynch, Peter, and John Rothchild. Beating the Street: a Special Edition for Worth Subscribers. Simon & Schuster, 1994.

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Program and participation details for college tuition credits program: Monetta has partnered with SAGE Scholars to offer families a College Tuition Rewards Program to any shareholder that enrolls in the program. These rewards/points can be used to offset college tuition fees at over 375 participating colleges nationwide. Enrollment is free and each registered child will initially receive 500 points in Tuition Rewards. Annually, on the child’s birthday, their account will earn additional points based upon their age. Tuition rewards are remitted solely as a reduction from the college’s full tuition bill and are not awarded in cash. Certain restrictions may apply. The Tuition Rewards program is offered and administered by SAGE Scholars, Inc., a private for-profit corporation. Monetta Financial Services, Inc., (MFSI) through a partnership with SAGE Scholars offers a college tuition reduction program that may be used at over 375 participating colleges nationwide. Tuition Rewards must be applied evenly over four years and that if unused by the student, they will expire three years after that student graduates from high school. All costs for the College Savings Program, including participation in the Tuition Rewards Program, are paid by MFSI. For program details and restrictions please visit www.tuitionrewards.com or call 1-800-Monetta. Tuition Reward registration bonus points are issued one time only. If the investor and/or student already has a Tuition Rewards account through Monetta or another SAGE financial partner, he or she is not eligible for additional registration points.

Monetta Financial Services, Inc. is the adviser to the Monetta Funds. The Monetta Funds are distributed by Quasar Distributors, LLC.