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Tuesday, January 31, 2023
The 5 Biggest Investing Takeaways of January 2023
The 5 Biggest Investing Takeaways of January 2023
Happy Tuesday – I'm glad you're here with us to finish out the first month of the new year.
At the end of each month, I like to gather some of the biggest investing takeaways we've shared in TradeSmith Daily.
I know that it can be difficult to find the time to read every issue, and I know there may be some things you read earlier in the month that you would like to reference again.
In today's issue, you'll find a variety of moneymaking ideas, no matter your investor type.
From forecasts by our team of experts, to a battle between two home improvement stocks, to a dividend-stock investing strategy, to a crypto to buy not named Bitcoin (BTC), to three potential takeover targets in the year ahead, we have a little bit of something for everyone.
It hasn't been easy being a stock investor lately...
The S&P 500 plunged 20% in 2022 — with many older investors taking even bigger losses.
So when TradeSmith CEO Keith Kaplan showed these two ordinary folks his method for collecting hundreds of dollars in instant income from the markets — without owning a single stock...
You can see their expressions change from concern — to relief...
Especially when they find out just how straightforward it is.
Takeaway No. 1: There Are Always Pockets of Profitable Opportunities
While a few of the usual top New Year's resolutions of eating healthier, exercising more, and spending less time on social media may have already been broken (no judgment), I want to make sure TradeSmith is in your corner to keep you on track for your investing goals.
For that, we have our 2023 investing forecast series from our experts, who show that no matter what the market is throwing your way, they're here to guide you on how to make money
Takeaway No. 2: The Battle of the Home Improvement Stocks
With the housing market cooling off, home improvement stores are expected to see a decrease in demand. If fewer homes are being sold, then that means fewer folks buying cans of paint and lighting fixtures in order to spruce up their homes and make those Realtor.com photos pop.
LikeFolio Co-Founder Andy Swan is seeing this tapering of demand in his real-time data, with mentions of buying a home down 24% year-over-year (YoY) and mentions of home renovations down 11% YoY.
But among that data, Andy also uncovered a housing trend that is picking up: an increase in mentions about hiring a contractor, which are up 9% YoY.
People may have delayed putting their house on the market for months or even years until interest rates went down and fears of a recession subsided. And if they plan to be in their current home for a while, they may be turning to professionals to add personal touches that require more skill than a DIY project from Pinterest.
To get the supplies they need for these jobs, many contractors start by turning to two stores: Home Depot Inc. (HD) and Lowe's Companies Inc. (LOW).
On the surface, there isn't much that distinguishes HD and LOW as investments.
Takeaway No. 3: Don't Forget About the Dogs of the Dow
Early in the new year, Senior Analyst Mike Burnick likes to revisit one of his all-time-favorite dividend-stock investing strategies.
The Dogs of the Dow is a simple, two-step strategy:
Buy the 10 stocks with the highest dividend yield out of the 30 stocks in the Dow Jones Industrial Average (DJIA).
Hold them for one year.
This concept is effective because you're starting with a list of proven, blue-chip stocks from the widely followed DJIA. These 30 stocks have been around for many years and are some of the biggest companies in the world. Plus, nearly all of them pay dividends, and the Dogs of the Dow pay you the highest dividend yields of all.
Takeaway No. 5: Three Potential Takeover Targets for 2023
The team recently compiled a list of three companies that could be acquired over the next year by larger firms.
All three companies offer something unique, ranging from one-of-a-kind sports content to a rich library of hit TV shows to potential treatments for a rare disease.
To get a deal done and win shareholder approval, the company making the acquisition will often offer a nice-sized premium from where the stock price of the acquisition target is trading.
We've been covering the first stock on the list since August 2022, and Quantum Edge Pro Editor Jason Bodner recently picked up on some unusual buying activity.
You can find out more about that – as well as the other two stocks on the list – here.
And before you go, I'd be interested in hearing what your biggest takeaways have been thus far to start the year.
Is your investing strategy working out as expected?
Are you feeling bullish?
Bearish?
Or are you just not quite sure what to make of things yet?
P.S. If 2022 taught us anything, it's that adaptation is key.
When cooling but still high inflation, rising interest rates, job layoffs, a housing market slowdown, new COVID-19 variants, and war all get thrown together, you can't expect your investing strategies from the past to work today.
Of course, executing a new investment plan can be a little scary... and downright intimidating for some folks.
TradeSmith is not registered as an investment adviser and operates under the publishers' exemption of the Investment Advisers Act of 1940. The investments and strategies discussed in TradeSmith's content do not constitute personalized investment advice. Any trading or investment decisions you take are in reliance on your own analysis and judgment and not in reliance on TradeSmith. There are risks inherent in investing and past investment performance is not indicative of future results.
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