Stocks are off to a solid start this year.
But the performance of the major indexes has been decidedly uneven.
For example, the Dow is up 8.3%, the S&P is up 7.0%, the tech-heavy Nasdaq is only up 3.4%, while the small-cap Russell 2000 is up 14.1%.
While small-caps led the market recovery last year with a gain of 144% from the pandemic lows, tech was a juggernaut as well with a gain of 113%.
But tech is currently underperforming. And small-caps have seen their leadership position being chipped away at.
Sector rotation is one of the reasons why. And it’s affecting everything.
The economy, and therefore the market, are poised for a spectacular year. But if you don’t know where the money is flowing, you could get left behind in what is shaping up to be an historic opportunity.
Things Change
Energy, for example, got pummeled last year. So did Transportation.
But Energy is currently the top performing sector this year, followed by Transportation.
We’re also seeing strong showings in Retail-Wholesale (no surprise there), Construction, Industrial Products, and Basic Materials. (And those last three should see even greater gains when the infrastructure package gets going.)
What a difference a few months makes.
Tech should remain strong, but you’re going to have to be more selective. Gone are the days when you could be in anything tech-related and watch it go up.
Quite frankly, the market is clearly showing us that there are better places to put your money right now.
Continued . . .
------------------------------------------------------------------------------------------------------
Alert: Buy These Ultimate Four Stocks Monday
There's still time to get in early. These aren't just 4 promising stocks. From hundreds of strong companies, they were handpicked by Zacks' experts because they present the greatest upside potential for Q2.
One is a well-established pharmaceutical company with 37 years of proven consecutive earnings growth. Another is a leading international manufacturer of semiconductors, flat panel LCDs, and solar cells. To learn more and discover the other two stocks most likely poised for a remarkable Q2, download our report – free.
The deadline to access our newly released Ultimate Four Special Report is Sunday, April 4.
See Stocks Now >>
------------------------------------------------------------------------------------------------------
Big or Small
Small-caps typically lead at the beginning of a rebound. That was on full display last year.
But in the last few weeks, small-caps have been slipping, and big-cap cyclicals have been gaining.
Small-caps are still in the leadership role for now. But studies have shown that small-caps, mid-caps, and large-caps, all have their day in the sun.
But with growth stocks starting to take a backseat to value, and since many growth stocks are indeed small-caps (smaller, newer companies in the early part pf their growth cycle), it looks like small-caps will face steep competition from the other capitalization classes, not to mention other styles classes.
Moreover, growth stocks and small-cap stocks are usually more at risk when taxes go up. And taxes are most likely going up to pay for the infrastructure package and other stimulus measures recently passed.
This too is factoring into the rotation we’re seeing right now.
But note, that doesn’t mean growth stocks and small-caps should be shunned. On the contrary, there are plenty of strong picks in those categories that are poised to soar. But you will definitely have to be more choosey in which ones you get into.
Rising Tide
Look, we all know the economy is set for historic growth. In fact, full-year GDP is expected to grow at the fastest pace in 33 years.
We’ve seen record job growth over the last 9 months, and that’s expected to continue.
Home sales recently hit a 15-year high.
And interest rates, which are near zero, are at all-time lows, and are expected to stay that way for the next 2 years.
As more of the country and economy opens up, we’re about to see unprecedented pent-up demand meet unprecedented stimulus money, and that could fuel even bigger gains.
But the old adage of a ‘rising tide raises all ships,’ has sailed already. Virtually everything bounced up from the pandemic lows.
To beat the market going forward, you’re going to have to be far more discerning.
Stock Picker’s Market
Picking the right stocks is easier than you think.
Especially when you implement tried and true methods that work.
For example, stocks with a Zacks Rank #1 Strong Buy have beaten the market in 26 of the last 32 years with an average annual return of 24.7% per year? That's nearly 2.5 x the S&P. But when doing this year after year, that can add up to a lot more than just two and a half times the returns.
Stocks in the top 50% of Zacks Ranked Industries outperform those in the bottom 50% by a factor of 2 to 1? There's a reason why they say that half of a stock's price movement can be attributed to the group that it's in. Because it's true. And now more than ever as the great rotation has begun.
Those two things will give any investor a huge probability of success.
But you’re not there yet, as those two items alone will only narrow down a field of 10,000 stocks to the top 100 or so. Way too many to trade at once.
So, the next step is to get that list down to the best 5-10 stocks that you can buy.
Stock Picking Secrets of the Pros
Whether you’re a growth investor, or a value investor, prefer fast-paced momentum stocks, or mature dividend-paying income stocks, there are certain rules the experts follow to maximize their gains.
This applies to large-caps and small-caps, biotech and high-tech, bitcoin/blockchain, marijuana, ETF’s, stocks under $10, stocks about to surprise, even options, and everything in between.
Regardless of which one fits your personal style of trade, just be sure you’re following proven profitable methods and strategies that work, from experts who have demonstrated their ability to beat the market.
The best part about these strategies and stock picks is that all of the hard work is done for you. There’s no guesswork involved. Just follow the experts and confidently start getting into the right stocks in the right industries on your very next trade.
The Pros’ Best Picks for Today
Here’s an easy way to find them:
Download our just-released Ultimate Four Special Report.
It highlights 4 stocks with strong fundamentals that are hand-picked by our experts to have the biggest upsides for Q2.
There’s no better time to look into these companies. Now that stimulus checks are hitting the bank accounts of millions of Americans, the economy is on the brink of significant growth. Top analysts predict 2021’s GDP will come in at the fastest pace in over 30 years.
The market is primed to surge in these conditions – and these 4 stocks are predicted to jump sooner and climb higher than others:
Stock #1: Specializing in personal finance and consumer service brands, this Midwest-based company recently saw very strong earnings in Q4 with nearly $1B more in revenue than expected.
Stock #2: This leading international manufacturer of semiconductors, flat panel LCDs, and solar cells reported exceptional first-quarter fiscal 2021 results in addition to a robust outlook for the rest of the year.
Stock #3: With five powerful segments, this stock is showing major earnings strength compared to the rest of the industry. The stock has more than doubled since October.
Stock #4: Combining innovative, groundbreaking technology with decades of experience, this large-cap pharmaceutical company boasts consecutive earnings growth for over 36 years.
I suggest you beat other investors to the punch and download this Special Report today. This rare opportunity to boost your portfolio ends midnight Sunday, April 4.
See our Ultimate Four stocks now >>
Thanks and good trading,
Kevin
Kevin Matras serves as Executive Vice President of Zacks.com and is responsible for all of its leading products for individual investors. He invites you to download Zacks’ newly released Ultimate Four Special Report before this weekend’s deadline.
Image: Bigstock
The Great Rotation Has Begun
Stocks are off to a solid start this year.
But the performance of the major indexes has been decidedly uneven.
For example, the Dow is up 8.3%, the S&P is up 7.0%, the tech-heavy Nasdaq is only up 3.4%, while the small-cap Russell 2000 is up 14.1%.
While small-caps led the market recovery last year with a gain of 144% from the pandemic lows, tech was a juggernaut as well with a gain of 113%.
But tech is currently underperforming. And small-caps have seen their leadership position being chipped away at.
Sector rotation is one of the reasons why. And it’s affecting everything.
The economy, and therefore the market, are poised for a spectacular year. But if you don’t know where the money is flowing, you could get left behind in what is shaping up to be an historic opportunity.
Things Change
Energy, for example, got pummeled last year. So did Transportation.
But Energy is currently the top performing sector this year, followed by Transportation.
We’re also seeing strong showings in Retail-Wholesale (no surprise there), Construction, Industrial Products, and Basic Materials. (And those last three should see even greater gains when the infrastructure package gets going.)
What a difference a few months makes.
Tech should remain strong, but you’re going to have to be more selective. Gone are the days when you could be in anything tech-related and watch it go up.
Quite frankly, the market is clearly showing us that there are better places to put your money right now.
Continued . . .
------------------------------------------------------------------------------------------------------
Alert: Buy These Ultimate Four Stocks Monday
There's still time to get in early. These aren't just 4 promising stocks. From hundreds of strong companies, they were handpicked by Zacks' experts because they present the greatest upside potential for Q2.
One is a well-established pharmaceutical company with 37 years of proven consecutive earnings growth. Another is a leading international manufacturer of semiconductors, flat panel LCDs, and solar cells. To learn more and discover the other two stocks most likely poised for a remarkable Q2, download our report – free.
The deadline to access our newly released Ultimate Four Special Report is Sunday, April 4.
See Stocks Now >>
------------------------------------------------------------------------------------------------------
Big or Small
Small-caps typically lead at the beginning of a rebound. That was on full display last year.
But in the last few weeks, small-caps have been slipping, and big-cap cyclicals have been gaining.
Small-caps are still in the leadership role for now. But studies have shown that small-caps, mid-caps, and large-caps, all have their day in the sun.
But with growth stocks starting to take a backseat to value, and since many growth stocks are indeed small-caps (smaller, newer companies in the early part pf their growth cycle), it looks like small-caps will face steep competition from the other capitalization classes, not to mention other styles classes.
Moreover, growth stocks and small-cap stocks are usually more at risk when taxes go up. And taxes are most likely going up to pay for the infrastructure package and other stimulus measures recently passed.
This too is factoring into the rotation we’re seeing right now.
But note, that doesn’t mean growth stocks and small-caps should be shunned. On the contrary, there are plenty of strong picks in those categories that are poised to soar. But you will definitely have to be more choosey in which ones you get into.
Rising Tide
Look, we all know the economy is set for historic growth. In fact, full-year GDP is expected to grow at the fastest pace in 33 years.
We’ve seen record job growth over the last 9 months, and that’s expected to continue.
Home sales recently hit a 15-year high.
And interest rates, which are near zero, are at all-time lows, and are expected to stay that way for the next 2 years.
As more of the country and economy opens up, we’re about to see unprecedented pent-up demand meet unprecedented stimulus money, and that could fuel even bigger gains.
But the old adage of a ‘rising tide raises all ships,’ has sailed already. Virtually everything bounced up from the pandemic lows.
To beat the market going forward, you’re going to have to be far more discerning.
Stock Picker’s Market
Picking the right stocks is easier than you think.
Especially when you implement tried and true methods that work.
For example, stocks with a Zacks Rank #1 Strong Buy have beaten the market in 26 of the last 32 years with an average annual return of 24.7% per year? That's nearly 2.5 x the S&P. But when doing this year after year, that can add up to a lot more than just two and a half times the returns.
Stocks in the top 50% of Zacks Ranked Industries outperform those in the bottom 50% by a factor of 2 to 1? There's a reason why they say that half of a stock's price movement can be attributed to the group that it's in. Because it's true. And now more than ever as the great rotation has begun.
Those two things will give any investor a huge probability of success.
But you’re not there yet, as those two items alone will only narrow down a field of 10,000 stocks to the top 100 or so. Way too many to trade at once.
So, the next step is to get that list down to the best 5-10 stocks that you can buy.
Stock Picking Secrets of the Pros
Whether you’re a growth investor, or a value investor, prefer fast-paced momentum stocks, or mature dividend-paying income stocks, there are certain rules the experts follow to maximize their gains.
This applies to large-caps and small-caps, biotech and high-tech, bitcoin/blockchain, marijuana, ETF’s, stocks under $10, stocks about to surprise, even options, and everything in between.
Regardless of which one fits your personal style of trade, just be sure you’re following proven profitable methods and strategies that work, from experts who have demonstrated their ability to beat the market.
The best part about these strategies and stock picks is that all of the hard work is done for you. There’s no guesswork involved. Just follow the experts and confidently start getting into the right stocks in the right industries on your very next trade.
The Pros’ Best Picks for Today
Here’s an easy way to find them:
Download our just-released Ultimate Four Special Report.
It highlights 4 stocks with strong fundamentals that are hand-picked by our experts to have the biggest upsides for Q2.
There’s no better time to look into these companies. Now that stimulus checks are hitting the bank accounts of millions of Americans, the economy is on the brink of significant growth. Top analysts predict 2021’s GDP will come in at the fastest pace in over 30 years.
The market is primed to surge in these conditions – and these 4 stocks are predicted to jump sooner and climb higher than others:
Stock #1: Specializing in personal finance and consumer service brands, this Midwest-based company recently saw very strong earnings in Q4 with nearly $1B more in revenue than expected.
Stock #2: This leading international manufacturer of semiconductors, flat panel LCDs, and solar cells reported exceptional first-quarter fiscal 2021 results in addition to a robust outlook for the rest of the year.
Stock #3: With five powerful segments, this stock is showing major earnings strength compared to the rest of the industry. The stock has more than doubled since October.
Stock #4: Combining innovative, groundbreaking technology with decades of experience, this large-cap pharmaceutical company boasts consecutive earnings growth for over 36 years.
I suggest you beat other investors to the punch and download this Special Report today. This rare opportunity to boost your portfolio ends midnight Sunday, April 4.
See our Ultimate Four stocks now >>
Thanks and good trading,
Kevin
Kevin Matras serves as Executive Vice President of Zacks.com and is responsible for all of its leading products for individual investors. He invites you to download Zacks’ newly released Ultimate Four Special Report before this weekend’s deadline.