What a day, huh?
To be honest, I think the huge move higher is an overreaction. But as I told my team today, I’d much rather have an overreaction to the upside.
I’m not downplaying the importance of a vaccine in any way. We obviously can’t wait for one and want to get back to living without COVID-19 as quickly as we can.
But please keep in mind that as exciting as today’s news from Pfizer (NYSE:PFE) is, this is still early data. It has not been peer reviewed yet. And the clinical trial is still going on.
It doesn’t mean we have a vaccine yet.
With that in mind, it’s a bit crazy to run a stock like Dave & Buster’s (NASDAQ:PLAY) up more than 30%. Sure, it’s a cool place that will do a lot better when we do have a vaccine, but a blow-the-roof-off rally like today is too much.
And on the flip side, it makes absolutely no sense that a stock like Zoom Communications (NASDAQ:ZM) would drop 17% today. We won’t all be back in our offices by the end of the week. And even if we were, would we just stop using Zoom?
Of course not.
But that’s the way the market works. And as long as you understand that, you can use it to your advantage …
I hope some of your stocks were up big today. We’ll take gains any time and any way we get them, right?
But I would also suggest keeping an even keel. Just as when stocks sell off, you don’t want to get carried away in upside mania.
The path to true wealth is long-term investing. And with that in mind, here are three important reminders from today’s action …
First, don’t chase stocks that move irrationally higher, like Dave & Buster’s. You can be all but certain they will pull back.
Second, take advantage of irrational pullbacks to buy good stocks. Like Zoom.
And third, diversify. One group of stocks may be up one day and down the next, and another group may do the exact opposite.
You want to diversify a couple of ways. One is among the best stocks within a hypergrowth trend. That’s why I recommend the “basket” approach. Own the best stocks within a transformative trend — like 5G, artificial intelligence, next-generation batteries, and more — and you increase your chances of big gains overall.
You also want to diversify among asset classes. For example, gold is a traditional hedge against inflation. If you’re a regular MoneyWire reader, you know that bitcoin and cryptocurrencies are increasingly attractive hedges that can make you a lot of money.
I would also point to another great opportunity we’ve talked about recently: investing in private companies.
If you’re only investing in stocks and not diversifying with private companies, you’re overlooking one of the top wealth secrets of the super-rich.
You wouldn’t be alone. Many investors don’t think about investing in private companies because they don’t know they can.
I’ve written to you over the last week about a powerful new law that has paved the way for one of the biggest business shifts in U.S. investing history. Everyone can now participate in the previously secret market of lucrative private deals … where tiny startups go from zero to $10 billion in a flash.
This revolution will transform the investment landscape … allowing everyday investors to make life-changing returns by investing in America’s best small businesses before they are publicly traded.
Like those who were first to back Facebook (NASDAQ:FB) and made a 1,200-fold gain.
People who bought private shares of Groupon (NASDAQ:GRPN) saw a 520-fold winner.
And if you took part in the private seed round of WhatsApp, you would’ve made a 2,750-fold return.
The best stocks today were private companies at one point.
Most investors know that the earlier you invest in a breakthrough business, the more money will be made. Private businesses are as early in the investment process as you can get.
You may never see a 500-fold gain in a stock, but you do have a chance in a private investment.
And the earliest investors who buy private almost always come out ahead compared to those who just buy stocks.
If you want to learn more about this exciting new opportunity, I invite you to join me for a special event I’m hosting called The Hollywood Blockbuster Deal tomorrow, Tuesday, November 10, at 7 p.m. ET. I’ll tell you everything you need to know and do to instantly gain access to this secret market.
It’s free to attend, and my hope is to open a new door to big profits for you. All you have to do is sign up here.
I hope to see you then.
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.