Buy to the sound of cannons, sell to the sound of trumpets.

If you've been a Rich Retirement Letter reader for a while, you've probably heard me reference this saying attributed to Nathan Rothschild before. 

Essentially, it means you want to buy stocks at low prices when everyone else is afraid and sell shares at high prices, typically when everyone else is feeling euphoric.

Whenever markets get too extreme in either direction, I try to remind you to keep a level head. 

After all, everyone knows that you want to buy low and sell high. But in times of extreme stress, it can be easy to forget this simple principle.

Today I want to take a closer look at one area of the economy that has sold off following the banking crisis.

As I’ll explain in a moment, these misunderstood stocks can help grow your wealth when they rebound as investors finally come to their senses.

Blue-Chip Banks Are Too Big to Ignore

It's no secret that banks are struggling right now, especially smaller regional banks across the country.

Regional banks play a vital role in small-town America, helping individuals and small businesses with checking accounts, loans, and various services. 

But most of these banks aren't considered vital to the overall banking system. So investors can't expect the government to fully rescue any of them if they run into trouble.

Large blue-chip banks, on the other hand, are very different. The Federal Reserve and other political institutions see these banks as extremely important to our country's financial well-being. 

And we can expect that in a crisis, the government will give these large banks assistance so they don’t fail. We saw this assistance during the global financial crisis of 2008. 

That's good news for investors. Because at a fundamental level, we know that the FDIC, the Federal Reserve, and other political players will backstop large banks.

In some cases, large banks could even benefit from a crisis. For example, this week First Citizens Bank was allowed to purchase the assets of failed Silicon Valley Bank. 

First Citizens got a great deal for these assets, and its stock soared higher on the news.

Looking forward, I expect many of the largest U.S. banks to make similar purchases as smaller banks run into challenges. 

And that gives us a great opportunity to buy blue-chip banks now before these deals drive their stock prices higher.

Watch Big Banks for Buying Opportunities

The current crisis has stock prices of banks trading sharply lower. For now, this is true of both small banks and their large blue-chip counterparts.

But it's clear that small banks are much more at risk than large-cap banks. So you should consider buying shares of large-cap banks while they’re still trading at a discount. 

These can either be long-term dividend plays that you hold for decades or short-term investments you make ahead of a rebound this summer.

Of course, the crisis is still ongoing, and there are always risks whenever you put investment cash to work.

While I can't tell you for sure that the large-cap banks are finished trading lower, I can tell you that I expect a very sharp rally once investors figure out large banks are going to be just fine.

If you want to put some money to work in the banking sector, here’s what I recommend...

First, identify three large-cap banks you want to invest in. That way, you're diversified in case something bad happens to one of them.

Second, decide how much capital you're comfortable putting into this area of the market. 

Remember, you always want to take a balanced approach to investing. So don't put more than you can afford to lose into any one stock or sector.

Third, divide the capital you want to invest into three or four amounts. If you have $10,000 to put into banking stocks, you might have four baskets of $2,500 each.

Put the first basket to work today, buying a few shares of each blue-chip bank stock. Then add the second basket in a week or two...

Keep adding a new basket of capital to your bank stocks every few weeks until you've invested the full amount you planned to work with.

By taking your time putting the capital to work, you can get a better deal if the stocks continue to trade lower. 

But you're also getting some capital in play right now in case the bottom is already in place for blue-chip bank stocks.

This dollar-cost averaging technique is a great way to put new money to work in the market. 

And it's just one of the disciplined steps you can take to grow and protect your wealth in a challenging market.