Nick Hodge,
Publisher
May 9, 2022
Publisher’s Note: Members of my Foundational Profits remain up for the year as the stock market continues to fall. We sold tech stocks last December for profit and have been largely out of broader equities. See the note below that I sent them recently for current guidance on the bear market for stocks that is developing.
—Nick
From Foundational Profits (April 29, 2022)
The selloff we front-ran is now turning into a bear market.
The S&P 500 is down 15% for the year. The NASDAQ is now down more than 20%.
Not only is our entire closed and open portfolio up, you own assets that are notching new highs in the face of slowing growth and ramping volatility.
Altria (NYSE: MO), for example, hit a new 52-week high last week. It’s also yielding over 6.5%!
So it’s possible to navigate this chop successfully. But it takes work, or at least being willing to listen to someone who puts it in.
Because it’s looking like it’s going to get rougher from here. As of today:
- With just over half the S&P 500 companies having reported Q1 financials, earnings growth is being dragged down by financials and consumer discretionary companies even as energy and real estate deliver growth.
- Economic growth is slowing as well. Q1 gross domestic product for the US grew at 3.6% over the same quarter last year. That is the slowest year-over-year growth in the past four quarters.
A Fed hoping for a “soft landing” is seeing market turbulence before the runway is even in sight.
We have been positioning for a slowing growth scenario since December 2021. In fact, we sold out of all tech stocks that month, locking in gains and avoiding the carnage that is now ensuing:
And we continue to position defensively for slow growth and falling stocks.
Expect much more in the May issue, due out on May 13th.
Having an up year given what we’ve faced so far is a commendable feat. Well done if you’ve been successfully following along.
If you’re not a member of Foundational Profits, click here.
Nick Hodge
Publisher, Daily Profit Cycle