One of my alter egos is “Dr. McCall.”
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Makes you wonder what some of the others are, doesn’t it?
We’ll save those for another day because Dr. McCall is the most important right now.
It has been a wild couple of weeks in the market. Nothing like what we saw one year ago, but enough to make investors uneasy.
When things get bumpy, I get questions from my readers, clients, coworkers, friends, Uber driver … you name it.
I’ve been at this a long time, so I know exactly what you’re thinking and feeling. And I know the mistakes investors make when the emotions take over.
So pull up a chair and sit down with Dr. McCall here for a few moments. I can tell you exactly what to do right now …
You’re probably feeling a little better today. The Dow and S&P 500 both hit all-time highs — again. And the Nasdaq 100 bounced after officially falling into correction territory (down 10%).
Growth stocks took a hit, no question. Looking at my own account on Monday, a lot of stocks I own got demolished. I looked at the action and just slouched down in my chair. And I may or may not have poured myself a drink that evening (after going to the gym, of course!).
When stocks get hit, investors get nervous. That’s completely understandable. But I have a few thoughts that might help you in today’s session.
First, remember one year ago? The latest pullback was nowhere near as bad … and we got back to all-time highs quickly.
Second, don’t ever sell just because it seems like everyone else is selling. That’s panicking, not investing. It’s also when most investors dig themselves into holes that they never seem to get out of.
And third, stay focused on the big picture and the long term … and ignore the freaking headlines. (Don’t even get me started on the financial media.)
That brings us to my mantra for right now and quite possibly the entire Roaring 2020s. Those of you who watch my podcasts can say it with me. Ready?
Buy the dips!
When you’re bullish, pullbacks and even corrections are great buying opportunities.
If a company has the same business model and growth potential this week as it did three weeks ago but can be bought for 40% cheaper, that’s a no brainer!
I am super bullish on the market … and extremely bullish on the hypergrowth trends and stocks we’re following. Here are six reasons why:
The Great Grand Reopening. Vaccination distribution is picking up speed. COVID-19 cases and hospitalizations are declining. The economy is beginning to reopen, and with it comes pent-up demand to do the things we haven’t been able to. Those things cost money. Which brings us to …
Record amounts of cash in checking and savings accounts. I know businesses have been devastated and people have lost jobs, and it’s tragic. At the same time, Americans as a whole are sitting on more cash then ever before. We have the money to spend on the things we want to do.
More stimulus is on the way. Congress just passed the American Rescue Plan, which will inject $1.9 trillion more into the economy. Add this to the previous bills in March and December of last year and you’re talking $2.8 trillion total. That’s a huge amount, and most of it will flow into the economy … and the stock market.
Interest rates are still historically low. Please remember this when you read all the scary headlines about rising bond yields and rates and how bad that is. And remember this even more — stocks historically go UP when rates are rising.
Don’t believe it? You might not if you listen to the media, but here’s a chart from my friends at LPL Financial that prove it:
Corrections happen. They always have and always will … and yet stocks continue to move higher over time. That makes them great buying opportunities. This is incredibly important because it’s where so many investors get derailed.
Think back to one year ago and how it seemed like the financial world was coming to an end. Here we are 12 months later at record highs and the S&P 500 is more than 35% higher. As this chart (also from LPL) shows, that’s to be expected. The average and median returns 12 months after the fastest corrections in history are right there around 30% … and the market is higher 90% of the time.
Innovation will not be stopped. The big, powerful hypergrowth trends we follow continue to move forward. The pandemic didn’t stop them — if anything, it accelerated them — and nothing else will either.
This is the nature of markets. The pendulum swings too far in the short term. Stocks were overbought after a nice run, and the rotation of money shot the pendulum way too far in the other direction.
That means good stocks with big potential go on sale, creating amazing long-term buying opportunities.
I bought stocks myself and for clients, and I recommended stocks in both Investment Opportunities and Early Stage Investor last week when the S&P was at its recent lows. Our three Early Stage Investor stocks are up 25% in less than a week, and our Investment Opportunities stocks — part of our brand-new Great Grand Reopening Portfolio — are up 9% in exactly a week.
Will they pull back again? Maybe.
If they do, it will be another buying opportunity.
So concludes this session with Dr. McCall, and it didn’t cost you a thing. In fact, I hope it will help you make money.
On the date of publication, Matthew McCall did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Matthew McCall left Wall Street to actually help investors — by getting them into the world’s biggest, most revolutionary trends BEFORE anyone else. Click here to see what Matt has up his sleeve now.