We’re just a few days into December, but they’ve been quite volatile ones for the stock market. Monday was an especially hard day for stocks, as the S&P 500, Dow and NASDAQ slipped 1.8%, 1.4% and 1.9%, respectively. Stocks didn’t fare much better today, as the major indices continued to trek lower.
However, I wouldn’t let the recent market action get you down. In fact, I think the early December pullback could eventually serve as a launching pad for stocks this month. The truth of the matter is that December is seasonally one of the strongest months of the year.
The folks at Bespoke recently pointed out that the Dow has posted an average gain of 1.52% in December over the last 100 years. It’s important to note that these positive returns are achieved 74% of the time, which is the strongest positivity rate of any other month. Looking at the more recent returns, Bespoke reports that the Dow posted an average gain of 1% in December in the past 20 years, with positive returns 65% of the time.
December is also a positive month for the S&P 500, with the index posting an average 2.02% gain since 1928. However, the returns aren’t nearly as impressive when you break out the years where the S&P 500 enters the month of December down 10% or more year-to-date. The fact is we often see some tax-loss selling in the final weeks of December when the S&P 500 is down year-to-date.
Overall, though, December should be a seasonally strong month for the S&P 500 and Dow, which is why I recommend folks pick up shares of fundamentally superior stocks – companies that can consistently grow their sales and earnings and hold a high rating in Portfolio Grader – on dips.
After taking a close look at the latest data on institutional buying pressure and each company’s fundamental health, there were 26 stocks that were downgraded to a Sell (D-rating) over the weekend that I do not consider good buys right now. I’ve listed the first 10 stocks that were downgraded from a Hold (C-rating) to a Sell below, but you can find the full list of stocks – including the Fundamental and Quantitative Grades – here.
All told, I revised my Portfolio Grader recommendations for 92 big blue chips. Chances are that you have at least one of these stocks in your portfolio, so you may want to give this list a skim and act accordingly.
|Ticker||Company Name||Total Grade|
|BNS||Bank of Nova Scotia||D|
|CHT||Chunghwa Telecom Co., Ltd Sponsored ADR||D|
|CM||Canadian Imperial Bank of Commerce||D|
|DLR||Digital Realty Trust, Inc.||D|
|HD||Home Depot, Inc.||D|
|HMC||Honda Motor Co., Ltd. Sponsored ADR||D|
So, what are the best stocks to invest in right now?
“Phase 2” stocks. Simply put, these are stocks that are experiencing persistent institutional buying pressure, which causes the stock to break out.
Now, there are four phases of a stock, which I explained in last Wednesday’s One Percent event. I also revealed an income investment that can put thousands of dollars of cash into your pocket over and over again – starting immediately.
This strategy is one I use in my Accelerated Profits service, and it’s allowed my subscribers to outperform the broader market nicely. My Accelerated Profits Buy List is up an average 2.4%. In comparison, the S&P 500 and Dow are down 16% and 7%, respectively. The average gain in our sold positions (including winners and losers) is 22%.
To say the least, 2022 has turned out to be a profitable year at Accelerated Profits!