💰 Investment Opportunities That Outlast The Market Turmoil
What’s up, peeps?
I’m Joseph Hargett, aka Mr. Great Stuff… aka that market-meme-making, song-lyric-slinging shill behind Great Stuff.
Some of you may already hear me yap on the daily (hey again!), but for all of you new virtual faces, it’s nice to meet you, albeit distantly!
For better or for worse (hopefully for better), the powers that be here at Paradigm Press reached out to me — of all people — to get my take on the market wool that’s been pulled over your eyes.
Yes, sorry if this is news to you … the market has been pulled over your eyes.
The U.S. economy marches along ho-hum despite a year of unemployment figures last seen during the Great Depression.
Weekly initial jobless claims are improving now but still come in at nearly a million a week. U.S. gross domestic product shrank a whole 3.5% last year, and you had every instant-armchair-historian crowing about the largest economic drawback in 74 years!
And yet, the wheel in the sky — err, Wall Street, keeps on turning.
Optimism about the vaccine rollout is as contagious as the pandemic that it’s trying to beat back. Stocks keep playing footsie with new all-time highs. Most of the S&P 500 is slinking along with inflated valuations even while earnings scrape the barrel.
Meanwhile, Reddit’s infamous gang of merry rebels took on the hedge funds in the Battle for GameStop (NYSE: GME) … only to get vaporized by the fully functional Death Star that is Robinhood.
Like a million diamond-handed GME holders suddenly cried out at once in terror … and were suddenly silenced. The illusion that valuations ever mattered broke right in two — no, wait a sec, we always knew that!
Many of you are likely confused … and not only by my pop-culture references.
How can the stock market continue to hit new all-time highs when the economy is in shambles? Or, if not in shambles, at least nowhere near as productive as it was prior to the pandemic.
In answer, here are two crucial axioms to remember:
- The stock market is not the U.S. economy.
- The stock market can remain irrational longer than you can remain solvent.
While the first axiom is true, there is one caveat: Stock values are supposedly based on a company’s perceived forward earnings projections.
In other words, a struggling economy will lead to lower earnings, thus eventually leading to lower stock valuations.
However, due to the second axiom, we’re all still waiting for the stock market to become rational. Nobody cared that earnings outside of Big Tech saw massive declines year over year. Beating lowered expectations looks and feels better anyway.
This leads us to probably the most important piece of advice I can give you about investing during periods of market insanity…
In my 15 years of investing and following the stock market, I’ve learned one critical lesson: You must be a long-term realist and a short-term opportunist.
Just what do you mean by that, Mr. Great Stuff? (Yes, I talk to myself. It’s a feature, not a bug.)
What I mean is that there are investment opportunities that will outlast the market turmoil. Gold, U.S. Treasury bonds and currency funds, for instance. Furthermore, there are stocks that you will also want to hold on to regardless of what’s going on in the market.
Microsoft (Nasdaq: MSFT), Amazon.com (Nasdaq: AMZN), Walt Disney (NYSE: DIS), Boeing (NYSE: BA) … there are many more, but these are all companies that have “been there, done that” when it comes to market plunges and recessions.
It’s why two of those companies made it to Great Stuff’s list of value-focused “Road to Recovery” plays. (And no, I won’t spoil the surprise for you here … I have to keep some mystique for when you read our write-up, after all.)
Stocks like these will hold their value better during market downturns — they’re your “long-term realist” plays for nearly any market environment short of a full-blown collapse. Buy companies like these. Hold them, and don’t think about them until you retire. Capisce?
That said, investing is no fun if all you do is sit and watch the grass grow. And despite many prevailing schools of thought, investing should have some degree of fun.
Even if most of your investment capital is tied to long-term realist investments, don’t hesitate to take short-term opportunities too! Not those “moonbound ‘till the crashdown” GameStop or dot-com era rallies either … but your standard growth stock kind of fare.
Not to brag (OK, I’m bragging), but Great Stuff readers banked three triple-digit winners in 2020 by taking advantage of short-term opportunities. And that’s not to mention the seven open triple-digit gains, either…
(Did I mention that Great Stuff Is free? Sign up here now!)
The bottom line is that the current market may seem scary, but in reality, there’s not a lot to worry about if you stay calm and invest on.
Keep your head. Don’t panic. But also realize that the market is messed up and completely out of touch with the economy.
Armed with this crucial market knowledge — and a fair amount of humor and pop culture thrown in — you can make it through any market environment. And if you need help along the way, Great Stuff is there to see you through the crisis with (hopefully) laughter and profits.
Until next time, be Great!
Editor, Great Stuff
Joseph Hargett is the editor of Great Stuff, a daily Banyan Hill e-zine that keeps you informed on the hottest trends on Wall Street, provides you with the key information to make you filthy rich (*your results may vary) and inspires the best in dinner-table conversation. Great Stuff is finance with an edge.