 12/24/2020 2020: Year in Review ✔️ The power of the Federal Reserve on full display... ✔️ How SPACs, a special type of stock, took the market by storm...  What a crazy year it's been.
In January, if you had told me half of it, I would have called you crazy. But here we are.
A global pandemic is still raging.
Joe Biden is about to be president.
The economy is in recession and markets are at all-time highs.
The speculation this year in the stock market has been insane. I'm not complaining, though. I've had a career year. I made millions in my personal trading account.* Some of my students reported six-figure profits.*
I've learned a lot this year too.
I want to take a few minutes and reflect on some of the important lessons we can all take from 2020. The trends we've seen in 2020 show no signs of slowing down in 2021.
I want you to be ready for next year. The best way to prepare for the future is to study the past.
Before we move on, I want to wish you happy holidays. There will be no edition of Swing Trade Millionaires tomorrow, but I'll be back at it on Monday, December 28. Sponsored Ad  New to trading? It's okay...
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The Fed Has a Limitless Check Book
Literally. When the Fed decides to buy, it can buy anything it wants. The Federal Reserve, the central bank of the United States, controls the currency.
That currency, the U.S. dollar, is the global standard too. And when the Fed decides to buy, it buys as much as it pleases.
This year alone it added $3.3 trillion to its balance sheet. Compare that to prior years...
At the end of 2019, the Fed's balance sheet was $4.1 trillion.
In the previous 11 years, from 2008 to 2019, it added $3.2 trillion to the balance sheet.
What has it been buying? It's been buying stocks and bonds to keep the market moving up.
It worked. The $3+ trillion new dollars have propped up financial systems. The stock market is at all-time highs.
No one can say for sure what the market would be doing without the influx of cash from the Fed. But we know this much for sure ... The market's rally at least partially because the Fed has been buying.
Always remember this. The market doesn't move based on news or unemployment. The market moves based on supply and demand — buyers and sellers.
When a buyer shows up with unlimited funds, the market's gonna rise.
I called it back in March. I said the market would rally once the Fed stepped in to help. I had no idea how much it would rally…
2020 saw the fastest market crash in stock market history. The S&P 500 fell over 35% in 21 trading days.
But the ensuing rally blew everyone away. Never ignore the Fed. It can buy more than any hedge fund, bank, or billionaire investor could ever dream of.
Remember this — the Fed controls the money.
That's not to say the individual retail investors didn't have some influence on this crazy year... Sponsored Ad Editor Note: Below is an important message from one of our highly valued sponsors. Please read it carefully as they have some special information to share with you.  SPAC Attack
More retail investors and traders entered the market in 2020 than ever before.
Apps like Robinhood made trading stocks into a game. The degenerates on Reddit's WallStreetBets made it a spectator sport.
They did things like betting their entire accounts on speculative plays. Some made a fortune. Others went broke. But one particular kind of stock seemed to outperform all the others: SPACs.
Special purpose acquisition companies offer an alternative way to take a company public. The SPAC sells shares with no unlying business. Then it takes the cash raised to buy or merge with an existing private company.
This strange investment vehicle's been around for decades. In 2020 it roared into the mainstream. DraftKings Inc. (NASDAQ: DKNG) and Nikola Corporation (NASDAQ: NKLA), two of the hottest plays of the year, started trading through SPACs.
The speculative nature of these stocks attracted amateur traders by the thousands. These stocks spiked time after time.
Some made huge moves without any news. And there are hundreds more in the pipeline.
I'm being very selective on these plays. I'm only buying the cream of the crop.
But I think 2021 could be a big year for SPACs too.
But SPACs weren't the only newly trading companies worth noting. Traditional IPOs broke records this year, too. IPO Bubble?
There's a record that was set back in 1999 at the height of the dot-com bubble.
Initial public offerings, aka IPOs, raised $108 billion that year. And we've never come close to that amount again … Well, that is, until 2020…
New IPOs raised over $140 billion in 2020. Some people are calling it a 'unicorn bubble.'
Others argue this time is different. Many of the dot-com IPOs had no actual business. All of the IPOs this year had revenue. Though not many are profitable…
The point is that money is flowing into the markets at record rates. Investors are extremely bullish and willing to take on a lot of risk at the moment.
Consider the action of the Fed. Look at the crazy amounts of money flowing into SPACs and IPOs. I don't see this market slowing down. Sponsored Ad  I did it again! I've helped another student of mine hit the million-dollar mark… And I'm looking for my 7th. If you want to get the same exact training he did… Risk and Reward
It's been a wild ride. And this year, the bigger the risk, the bigger the reward has been for many prepared trades.
Years like this don't happen often. But that's not to say we can't have back-to-back years with this kind of record growth.
The market can stay irrational longer than you can stay solvent. Don't fight the trend. And don't try to pick the top.
The bull market can continue. The biggest buyer has an unlimited amount of cash. And investors are willing to throw money at any shiny new stock.
The good times won't last forever. But I plan to ride the wave as long as it lasts.
Happy new year,
Paul Scolardi Editor, Swing Trade Millionaires P.S. There's never been a better time to be a trader. And with the volatility that we have right now, we're seeing tons of opportunity. But if you're a new trader, you might not know where to start. It can be overwhelming.
That's where Tim Sykes' 30-Day Bootcamp comes in. It's designed specifically to help brand new traders get into the market… and if you want to make the new year great, this is how you do it.
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