Moments like this – right now, today – are when you earn your keep as an investor. Stocks are risky assets. That's why they're able to deliver such big returns over the long term. But it's also why they'll test your fortitude from time to time.
Editor's note: Amid this uncertain market environment, it's natural for investors to feel scared...
As we've noted previously, things like tariffs, where inflation is headed, government services, and much more seem like they're up in the air right now. So it's no surprise that the market has been gyrating with the changing news and rumors.
But as we've also said, it's critical to keep a level head and stay disciplined. And that's the similar message from our friend Brett Eversole at our corporate affiliate Stansberry Research...
This essay published in yesterday's edition of Stansberry's free DailyWealth e-letter. And in it, Brett shared an important reminder for investors in the wake of the market chaos in recent days...
Panic Is in the Air
By Brett Eversole, editor, Stansberry Research
Moments like this – right now, today – are when you earn your keep as an investor.
Stocks are risky assets. That's why they're able to deliver such big returns over the long term. But it's also why they'll test your fortitude from time to time.
We're living through one of those moments right now.
If you've watched the news, you know how we got here. President Donald Trump's plan for global tariffs has investors panicked about what's ahead.
Stocks have crashed since the announcement. We aren't far from a bear market in the S&P 500 Index.
Everywhere you look, panic is in the air. But as you'll see today, now isn't the time to lose your head...
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It's actually much bigger and more important than what happens to the Nasdaq or S&P 500. Some of the world's best investors are practically drooling in anticipation because this crash will create a slew of 100%-plus opportunities... backed by legal protections that stocks can only dream of. A top expert believes this could happen within months (if not weeks) – and you must prepare now. Get the full story here right away.
President Trump announced sweeping global tariffs last Wednesday, after market close.
The new plan includes a minimum 10% tariff on any goods brought into the U.S. And many countries' individual rates are dramatically higher.
The announcement wasn't a surprise. But it far outpaced the size and scope of the tariffs on Canada, Mexico, and China that Trump had partially implemented in recent weeks.
The S&P 500 Index collapsed 10.5% in the two days after the announcement. And markets were down more than 4% again in early trading Monday morning.
Unsurprisingly, investors have panicked...
Two Measures Show Investors Are Panicking Today
We don't really need the data to show us how worried investors are right now. The feeling is palpable.
Still, the data tells us how bad things really are. And right now, things are bad.
One way to see it is through the CNN Fear & Greed Index. This indicator combines several factors – things like price action, new highs, options data, and volatility – into a single sentiment reading.
A low reading means folks are scared. And as of Monday morning, this measure was at 4... a sharp drop from last week's reading of 19. Take a look...
Fear and greed drive markets. It's often a give and take between the two. But currently, fear is in complete control.
We can also see how fearful folks are right now by looking at the CBOE Volatility Index ("VIX"). Investors often refer to the VIX as the market's "fear gauge." It spikes when uncertainty hits and prices are moving violently.
Uncertainty is definitely here. The recent VIX readings of more than 40 are some of the highest of the past 20 years. Take a look...
We're living through a massive spike in fear and volatility. Stocks are crashing as a result. And if you own anything in the markets, well, it stinks.
We still don't know whether this new tariff policy will last, or if it's simply the beginning of negotiations.
But either way, investors have chosen to sell first and ask questions later. That's typical in a market panic.
What You Can Do in a Market Crash
As I said earlier, stocks are risky assets. They're able to deliver fantastic long-term returns because this kind of situation is possible. Crashes will happen, like it or not. The only thing you can control is how you react.
You win in these moments by avoiding the panic... making cool-headed decisions... and remembering your edge.
As an individual investor, that edge is time.
You're not managing other people's money. You don't have to slog through committee meetings to make decisions or explain your actions. No external factors will force you to sell.
Instead, you can sit back, take a breath, and think through what's really best for you. And I don't mean what's best today... or tomorrow... or next week. Instead, focus on what's best over the next year... or five years... or the next decade. You need to focus on the long term.
Time is on your side. This panic – like every other – will NOT last forever. Things will calm down. Markets will recover.
I can't tell you exactly when that will take place. But I am 100% sure that it will.
Panic is in the air. But panic never lasts forever. So please, think long term... And avoid the big mistakes that could haunt your portfolio for years.
Good investing,
Brett Eversole Editor's note: In DailyWealth, Brett shares more than just the day-to-day developments and opportunities in the markets... He also shares ideas on how to safely and steadily build a lifetime of wealth.
Just like the ChaikinPowerFeed, DailyWealth publishes each weekday that the markets are open. And it's 100% free to read. Learn more about DailyWealth and sign up to receive it right here.
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
-0.81%
1
21
8
S&P 500
-1.57%
20
314
166
Nasdaq
-1.8%
1
64
35
Small Caps
-2.63%
73
1289
531
Bonds
-1.89%
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are strongly Bearish. Major indexes remain all strongly bearish.
* * * *
Sector Tracker
Sector movement over the last 5 days
Consumer Staples
-6.65%
Health Care
-7.23%
Utilities
-7.54%
Communication
-10.76%
Real Estate
-11.46%
Consumer Discretionary
-11.62%
Industrials
-11.68%
Financial
-11.72%
Information Technology
-13.59%
Materials
-13.94%
Energy
-18.68%
* * * *
Industry Focus
Health Care Services
14
41
3
Over the past 6 months, the Health Care Services subsector (XHS) has outperformed the S&P 500 by +11.22%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #2 of 21 subsectors and has moved down 1 slot over the past week.
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