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The S&P 500 surged above 7,800 for the first time ever last Thursday.
That would normally be enough to make investors nervous. And there are a few reasons to wonder whether this rally is getting stretched.
For example, the Atlanta Fed recently cut its third-quarter GDP estimate from 5.8% to 4.3%, largely in response to softer July retail sales.
But much of that weakness reflected spending pulled forward into June by Amazon Prime Day, while other consumer categories remained healthy. So, I don’t view the downgrade as a major warning sign.
The more important question is whether the market itself is getting overbought.
On the one hand, stocks staged a furious rally over the past couple of weeks. On the other hand, S&P 500 earnings will likely be up by 50% by the time it’s all said and done. And when earnings are growing faster than stock prices, that means valuations are shrinking.
To answer this question, my daughter Crystal and I brought on the “Fibonacci Princess” Tammy Marshall in the latest episode of Navellier Market Buzz.
We unpacked what’s really behind the GDP downgrade, examined her technical analysis of the current market and she also walked us through the charts on some of the market’s biggest names.
She even reveals two stocks she’s bullish on right now.
Click the image below to watch the latest episode of Navellier Market Buzz.
If you haven’t already, don’t forget to click here to subscribe to my YouTube channel. And to learn more about Tammy, check out her YouTube channel here.
Plus, the grades in Stock Grader (subscription required) have been updated this week! Click here to plug in your own stocks and see how they’re rated.
Picking the Winners Is Only Half the Battle
The fact that there are still opportunities in this market doesn’t mean you should simply throw money at every stock that’s moving higher.
And we’ve already seen what can happen when an investor gets the big picture right but gets the portfolio wrong.
Consider what happened with Leopold Aschenbrenner. As I wrote about in a previous Market 360 article, at one point, his Situational Awareness hedge fund reportedly soared to $45 billion.
He was celebrated across the market, hailed as a “genius.” Yet because he used too much leverage and had a concentrated portfolio in too few positions, he was forced to liquidate much of his portfolio when the market turned south.
Think about that.
He wasn’t wrong about AI. He was wrong about how he owned it.
I believe that’s one of the most important lessons investors can take from today’s market. Because going forward, it won’t be enough to simply identify the right AI stocks.
How much you own of each could matter just as much as which ones you own.
That’s a big reason why, after 47 years, I’m making a change to my role at InvestorPlace.
I’ll explain exactly what that means – and why I believe this change is necessary right now – during a special briefing this Wednesday, August 19, at 10 a.m. Eastern with my InvestorPlace colleagues Eric Fry and Luke Lango.
This is something we’ve never done before. And I believe it will allow me to do more to help you navigate the opportunities, and the risks, emerging from the AI boom.
Click here to reserve your spot for our special briefing.
Sincerely,
Louis Navellier
Editor, Market 360
