I haven’t updated my blog in a while, so here are some random market thoughts (in no particular order):
1) Many market participants are frustrated mainly because there are two different markets going on right now. The Nasdaq Composite is going through a correction and many growth stocks are 30-50% off their highs, but the S&P 500 just closed at an all-time high. How does one deal with this? You have to come up with a strategy based on your own investment plan. It could involve diversification or being patient until growth stocks firm up again. In addition, you might have to adapt to what the market is giving you. As Paul Tudor Jones says: “You adapt, evolve, compete, or die.”
2) If you are frustrated, don’t beat yourself up. Protecting your confidence during difficult times is just as important as protecting capital. Stop worrying about others and thinking everyone is killing it in this market. Focus on yourself and ways to improve your own results. Comparison is the thief of joy.
3) I think the current correction in the Nasdaq has less to do with rising interest rates and more to do with sentiment and all the supply coming to market. Sentiment was very heated coming into this year and the market needed to shake out some of that excess bullishness. Also, between all the secondary offerings and SPACs coming to market, there was a great deal of supply that needed to be absorbed.
4) Speaking of sentiment, it’s nice to see some put buying the past three days. It’s not super high but it’s better than the constant call buying that’s been happening, even on the down days.
5) Unfortunately, too many people are married to the big winners of last year and are frustrated that they’re not going higher. If you study history, you will understand that when stocks go up 100-500% in one year, they not only need to consolidate but are also likely to give back a decent amount of their gains.
6) I won’t mention what those stocks are because people are adamantly married to them and will wish death on you if you say anything negative about one of their beloved stocks. I understand why they love them. It’s because most people struggle to find winners in the stock market, so when they do, they fall in love with their winners. Just understand and accept it might take some time before these stocks resume their advance again. (And some might not resume their advance at all).
7) There will be another strong uptrend in growth stocks, you just have to be patient until healthier signs emerge. In the meantime, keep a watch list and pay attention to the stocks that are showing great relative strength. Those are the ones likely to be strong winners when the uptrend in growth resumes.
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Disclaimer: This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained in this video constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned in this video. The stocks presented are not to be considered a recommendation to buy any stock. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.