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Broad Market Outlook
We made it, since the inception of Trading Experts as a business this has been the worst trading environment this group has had to navitage through since 2017.
With the market at its worst down nearly 30% and it closing out the year down 21%, was it really that scary? We had quite the year of headlines, ukraine, rate hikes, rampant inflation, cyptro scams and all the other scary headlines that were throw at us.
But think for a moment, what was so scary in Feburary, or what was so scary in October? It's hard to remember right? This is why in the moment when things appear scary, its because they only appear it in that moment, just when you want to sell that long term name that you thought was going to be a winner and it turned out to be the opposite, is often the time to stick to the gameplan instead of switching it up.
We started the year at all time highs with most looking higher expecting that trend to continue, we are starting this year near recent lows and most, too, expect that trend to continue.
My thoughts are the opposite.
By end of year, my target in the SPY is 500, as 480 would be the retest and often we get that last little push through as late buyers chase creating the psychological resistance at 500.
Now I am also not expecting a series of green lights where the market just stair steps higher. If we do push down through new lows and really need to shake that low out a move down to 300 seems realistic.
As we saw this year in a falling market, waiting for the right times to act, still gave plenty of profitable spots to make money when you acted at the right times.
Right now, it seems as if we have a few watered down fears, where the market is grabbing at straws, unemployement is so low that its now apparently a bad thing.
Just as there are times when the market prays for rate hikes and then gets them and then prays for rates to drop.
With most of these watered down fears that a finance bro might get but the average investor would not follow as easly or be as afraid of are some of the reasons why I feel there are far more upside to look forward to then downside.
This year it seems most of us learned two main valuable lessons when it comes to long term investing.
1. Individual stock selection seems like a way to beat the market, yet when the market falls, those names often fall much harder
2. The benefits of dollar cost averaging no matter how bad the market appears.
The market dropped by more then 20% this year while our model only dropped 13%, there were members that were even positive on the year such as those who bought daily or increased contributions as the market dropped.
I hope that as the new year kicks off more members start to follow a similar approach where you have one active account with the goal of beating the market by swing trading and another account that is passive and automated such as a Big Picture account using M1. Where you can compare the performace of each and see which beat the market instead of just trying to beat the market.
As much as we want to buy all the sectors evenly, Consumer Discretionary and the Telecom sector are the two worst performing sectors this year that have the most room for upside this year. Just like how Energy was the worst sector in 2020, yet the best performing sector for the last two years. Both of those sectors had a rough year with discreationies getting dragged down by Amazon.
While most of the stocks painful performance has already occurred in the name, has your purchased on the site dropped by 50%? Probably not right? There is some more pain in store in the short term but those bases are often not to far off after the dramatic selling.
As much as most right now are talking about "new year, new me" and the 1,000 new things they will get done this year. This is a great time to reflect on the highs and lows of the prior year, the lessons learned from each and the 2-3 main things you want to accomplish.
Write those accomplishments down on paper to make them real and send them to someone you trust or post in the group so you hold yourself accountant to your goals.
A few goals of my own for the year ahead:
- Complete the entire 11 book series on Amazon plus publish Banned From Wall Street once the series is completed
- Move $100 mil in future value from Pre Tax to Roth accounts
- Assist 40 members this year with there tax return
What are 3 things you would like to accomplish this year?
From Bennett
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Macro Rotation Outlook
SPY
Dow Jones
Nasdaq
Mid Caps
Small Caps
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New Year New Merch!
We will be making 50 of these Banned From Wall Street Hoodies if you would like to get on the pre order list, reply to this email or message your hoodie size on discord!
Pre Order Cost $39
Once Inventory Arrives $49
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Sector Rotation
Sensitive - sectors that have moderate correlations to overall market conditions.
Tech
Energy
Industrial
Telecom
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Cyclical - sectors that are more sensitive overall market conditions.
Materials
Consumer Discretionary
Financials
REIT
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Tax Experts
We have reviewed quite a few tax returns so far and have yet to find one where we could not have added value.
We recently found a member who paid a tax penalty because his tax guy put he contributed $12,000 into his Roth when he only contributed the max. He paid a penalty for this persons mistake without being aware and his tax guy made up the most ridiculous excuse, it was just embarrassing.
What is the worst case of getting a 2nd opinion from someone who has successfully filed over 4,000 tax returns?
Let's have a second look at your tax return, if we can't find a way to save you taxes on this or next years return, we will give you a months membership free.
Worst case you get a free months membership!
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Defensive - sectors that tend to outperforming during sub par market conditions.
Consumer Staples
Healthcare
Bio Tech
Utilities
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Big Picture Set Up
FB
Even though FB is bottom right, there is still a nice base forming here for a move up through $125.
OXY
Sending up the Django bat sign, this OXY is setting up for a sneaky buy back up through $64 vs $60 for now.
TJX
Blue sky breakout setting up in this TJX, not much more we could want out of a high and tight flag at all time highs.
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