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Relax. Everything’s Fine. 😌
PLUS: Trade Like A Politician 🧑⚖️
Gainers📈 & Losers📉
Our Biggest Gainers & Losers of the Day in the $100,000 Build Portfolio
For the 20th December 2024:
Relax. Everything’s Fine. 😌
Trade Like A Politician 🧑⚖️
Relax. Everything’s Fine. 😌
You have to block out the noise. The markets have a rough week & everyone starts screaming “the sky is falling!”.
Your average bear at the sign of any red on the market
I get it. When you see the headlines it’s easy for rational thinking to go out the window.
“Maybe this time is different”
Then you take a look at the charts & see the Nasdaq is up over 26% for the year & all of sudden that 2.3% drop for the week looks a whole lot more reasonable.
A 26.77% gain in the last 12 months for Nasdaq. Pull backs are to be expected
Why the Drop Anyway? 📉
Before I blindly prescribe “buy the dip”, what’s caused the sell off?
The Fed came out with some hawkish vibes on Wednesday.
Bulls, bears, hawks… stock market’s turning into a petting zoo. What does hawkish mean?
In short, it means tighter policies AKA less rate cuts.
Jerome Powell reminded everyone that fewer rate cuts are coming in 2025 because inflation is still hanging around like your pal that can’t take a hint when it’s time for him to leave.
Powell’s exact words: “Inflation expectations have fallen apart.”
Cue the cries that the world is ending.
The Timeline 🗓️
Here’s how the week unfolded:
Wednesday: The Fed delivered a hawkish message. Markets tanked.
Thursday: Stocks tried to rally but fizzled out. No major catalysts = no bueno.
Friday: Core PCE inflation data arrived cooler than expected. Boom. 💥 Markets bounced.
Fortunately I’m a grizzled vet with this volatility & had already started picking up Nasdaq futures positions before Friday.
The Nasdaq futures positions I picked up last week
My open positions are up 3% overall. My price target is $22,100 which will make my average profit something like 93%. Not bad.
There’s a few things I look out for before buying futures that you can use for yourself.
First, I only trade the Nasdaq & second I only buy. That doesn’t mean buy in a downtrend. It means I only look for buy positions. I’m not interested in betting against something that has hoards of people way smarter than me trying to make it go up.
Next. Is it trading at least 5% down from ATH/recent highs? I like to buy the dips & target old highs to take profit. I find a 5% dip or more on an index usually gives a decent risk/reward profile. And because I use 20x leverage on futures, a 5% gain =100% profit which is nice.
Lastly, take a look at what’s dragging it down. You don’t want to start buying too early if the catalyst needs a while to play out.
My Plan 🗺️
All this to say, I think it’s time to buy the dip like you’re understock on a nacho’s night.
I’m adding more to my positions that have been dragged down by Jerome. Mostly tech & AI stocks so I’m happy to see the discounts.
Adding some futures positions like I’ve said & also adding a little my leveraged ETF positions too.
Volatility is the name of the game. You better get used to it. 😉
Trade Like A Politician 🧑⚖️
Here’s how investors are copying politician stock trades:
They’re doing it by copying politician trade-based portfolios on the Dub app. On Dub, you copy the trades of people, rather than trading individual stocks. All deposits are SIPC-insured up to $250k, not investment advice, read disclosures here.
Not investment advice. Full disclosures here.
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P.S Hit reply & let me know what you thought of today’s newsletter. All feedback is welcomed ❤️
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