Survive AND Thrive During This Crisis
This year has brought many surprises. No one expected a global pandemic to break out and change our lives so fundamentally. No one expected months of lockdowns.
Each month, it seems we’ve got a new adversary to face, whether it be pandemic-related or not.
But most of all, it’s the financial markets that continue to surprise many people this year.
End-of-the-year market predictions back in 2019 have had to be thrown in the dumpster and reevaluated.
And every day brings new stories from commentators in the media about how the stock market is “disconnected” from the economy and our society.
These commentators – many who seem to have only a dim idea of the relationship between the stock market and the economy – almost seem to want the market to tank.
What they don’t seem to understand is that the market reflects – and anticipates – changes to the economy.
It does a very good job of it too.
For example, mega tech stocks like Amazon (Nasdaq: AMZN) and Apple (Nasdaq: AAPL) have outperformed the market this year for a very good reason: The products and services they offer have dramatically increased in value thanks to our new stay-at-home economy.
It’s really that simple.
And this underestimation – maybe call it a miscalculation – of markets isn’t confined to journalists either. Goldman Sachs is just the latest Wall Street firm that’s had to readjust its estimate for what the S&P 500 will do this year, ratcheting its year-end target to 3,600 from 3,000 this week, according to Bloomberg News. (The S&P 500 Index stands at 3,383 as I write this.)
Simply put, in order to even attempt to predict what the market might do in the coming months, one really needs to understand what makes the market tick – in this case, a nationwide lockdown.
But this phenomenon – that the market anticipates changes in our economy – extends far beyond the well-known tech companies mentioned above.
Camping stocks are a great example.
About a month ago, Technical Options Expert Bryan Bottarelli predicted that socially distanced outdoor holidays would see a spike in popularity this summer. The stock he recommended on this trend, Yeti (NSYE: YETI), a popular company that makes coolers and other outdoor recreation products, has risen more than 20% since his prediction.
(After being stuck inside for five months, I’d say it’s a good idea to head outside for a week or so and decompress. Perhaps even put down our screens for a bit.)
Bryan’s got another great camping pick today, which you can read about here. In fact, I recommend you sign up for Trade of the Day to get the free recommendations that Bryan and Fundamental Options Expert Karim Rahemtulla publish daily.
And if you’re interested in getting even more great market insights from Bryan and Karim, where they spend much of their day recommending trades to members on a live forum.
While the mainstream financial media has been busy bemoaning a buoyant stock market, you’ll want to check out The War Room, our experts have been hard at work bringing readers great investment opportunities.
And we will continue to do so, so that you can survive this crazy year and be prepared to thrive when we all return to normal.
Enjoy your day and stay safe,
P.S. If you’re truly interested in surviving and thriving during these uncertain times, look no further than Chief Growth Officer Nathan Hurd’s aptly named Survive and Thrive video series. He covers topics like recovering your health, letting go of resentment, finding happiness in what you do and so much more. If you’d like to watch one of his latest videos, just click here and see what he has to say.
About Matt Benjamin
Matt has worked as an editorial consultant to the International Monetary Fund, the World Bank, the Economist Intelligence Unit and other global macro-institutions. He wrote about markets and economics for U.S. News & World Report, Bloomberg News and Investor’s Business Daily, among other publications. He also worked for several years as head of political economy for a Financial Times-owned macroeconomic consulting firm, advising hedge funds around the world. Matt’s claim to fame is that he’s interviewed two U.S. presidents and has spoken with five Federal Reserve Chairs from Paul Volcker through Jerome Powell. Matt also served as The Oxford Club’s Editorial Director for two years.