To say the markets have been volatile lately is an understatement.
But in spite of a tough year this year, the bull market remains intact.
Interestingly, after going nearly two years without a correction, this is now the second correction we’ve seen within the last 12 months. The first one in early 2018 ultimately saw the market recover and power to new all-time highs. This one is likely to do the same in time.
But there are challenges the market needs to overcome, not the least of which is the ongoing trade dispute with China.
So the ‘rising tide raises all ships’ scenario might be on hold for a while. But even during corrections, there are plenty of standout stocks.
While the S&P is down for the year and off more than -11% from their September highs, there are thousands of stocks beating the market. Over 1,080 stocks up 20% or more. And over 240 stocks up 100% or more YTD.
With that, there are plenty of investors handily beating the market.
So why are so many other investors underperforming the market?
Could it be that one of the reasons why so many people are not seeing the kinds of returns they want is because they don’t know of new stocks to get into? They find themselves in mediocre stocks because they don’t know of anything better instead?
I think for some, their knowledge or ‘universe’ of familiar stocks is relatively small and this limits their opportunity of getting into better ones.
Which Half Are You In?
Nearly half of the companies in the S&P are beating the index and showing positive returns this year. But that means roughly half of the stocks in the S&P 500 are underperforming the Index.
Even ‘good’ companies like MGM; they’re down -20.3%. Or Tyson Foods; which is down -30.8%. Or even Western Digital; down -49.8%. And there’s still 2 more weeks left in the year. So what gives?
I don’t single these out so you can feel bad if you have them. But instead, to stop and think about ‘why’ you have them.
Nobody invests so they can underperform the market. But if you are -- why? You don’t have to. If you’re underperforming the market, that means you have more of these types of laggards in your portfolio than leaders.
How the Other Half Lives
Of course, there are a lot of big names beating the S&P too. Take Starbucks, or Pfizer, or Microsoft for example. All are outperforming the S&P with gains of +16%, +23% and +28% respectively.
But now let’s move outside of the S&P.
Did you ever hear of a company called Veeva? What if you did? It has outperformed the market by gaining +66.2% since the start of the year. Or Dexcom? They’re up +114.4%. Or Attunity? Up by more than +195%. (By the way, these are all Zacks #1 Rank stocks.)
There are hundreds and hundreds of stocks producing fantastic gains that many people may never have even heard of.
Continued . . .
Deadline at Hand: Get Finding #1 Stocks Free
Despite the current correction the economy remains strong, according to Zacks EVP Kevin Matras. He believes the S&P will resume its trajectory to new highs and double in the next 5 years.
Today, Kevin is making his hardcover book, Finding #1 Stocks available to you for free. In it, he shares his best stock-picking secrets, including the exact formulas for strategies that recently produced gains of +111.0%, +122.0%, +137.9%, and +139.6%.
Opportunity ends when inventory is depleted and no later than midnight Sunday, December 16.
Learn more now >>
What about you? How many times have you heard about a stock or read about a stock that skyrocketed -- only to think to yourself; “if only I knew about that stock ahead of time, I would have been in that”.
Expand Your Universe and Pick Better Stocks
Increasing your stock knowledge and awareness of new and better stocks is easier than you think. And you don’t have to reinvent the wheel.
• For example, over the last 29 years, the Zacks #1 Rank stocks have beaten the S&P 500 in 24 of the last 29 years, with an average annual return of 25.3% a year vs. the market’s 10.2%. That’s more than 2 times the returns of the S&P with an 82% annual win ratio.
• Stick with the top industries. Since roughly half of a stock’s price movement can be attributed to the group that it’s in, you’ll significantly increase your odds of success by focusing on the best groups. By how much? Our tests have shown that the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of 2 to 1. And the top 10% of industries outperform the most.
• Or select your next stock from a proven profitable stock picking strategy -- like our ‘Filtered Zacks Rank 5’ strategy which was up over 94% last year; or our ‘New Highs’ strategy which was up 102%; or the ‘Big Money Zacks’ strategy which was up a whopping 112% last year!
Once you know what to look for, and how to pick better stocks, it can transform your portfolio.
You don’t need to turn yourself into an analyst to beat the market. Just focus on what works, and apply those methods consistently.
For most of us, our investments are the largest, most important chunk of money we’ll ever be responsible for in our entire life.
And if it isn’t now, it likely will be one day.
The leaders in the past (stock names we’re all too familiar with) will likely not be the leaders in the future.
But you can stay ahead of the pack by following some simple rules and methods that have proven to work.
And don’t be afraid to consider a stock you may never have heard of before. There was a time when some of the best stocks in your portfolio today, were brand new to you before you bought them. And now they’re one of your top performers.
The next time you read about or hear about a stock that’s skyrocketed in price; instead of thinking, ‘I could have been in that had I known about it’ -- wouldn’t it be great to say, “I’m in it!”
Where to Start
There's a simple way to add a big performance advantage for stock-picking success. It's called the Zacks Method for Trading: Home Study Course.
With this fun, interactive program, you can master the Zacks Rank system without attending a single class or seminar. Do it online in your own home at your own pace. It guides you to better trading step by step.
It works in volatile markets like today. In fact, it works any time.
Over the past 30 years, it has more than doubled the market, with an average gain of more than +25% per year.
Discover how to identify what kind of trader you are, how to find stocks with the highest probability of success, and how to trade them so you can consistently beat the market regardless of where stock prices are headed.
The course also lets you access the latest picks from some of our best strategies. From 2017-Q3 2018, they beat the booming +35.0% market with overall gains up to +111.0%, +122.0%, +137.9%, and +139.6%.
Today is the perfect time to get in. I'm giving participants free hardbound copies of my book, Finding #1 Stocks, a $49.95 value. Its 300 pages unfold virtually every trading secret I know and have learned over the last 25 years to beat the market.
Time is running out. Don't miss the chance to use the current market pullback as an exceptional buying opportunity.
Many of your fellow Zacks members have already claimed the book and copies are limited. Your opportunity to get one free ends no later than midnight Sunday, December 16. So if you're interested, be sure to look into this right now.
Learn more about Zacks Home Study Course and Finding #1 Stocks >>
Thanks and good trading,
Zacks Executive VP Kevin Matras is responsible for all our trading and investing services. He developed many of our most powerful market-beating strategies and directs the Zacks Method for Trading: Home Study Course.