Editor's note: Don't leave gains on the table... The S&P 500 Index is up 15% so far this year. And many folks are sitting on the sidelines – uncertain about the economy and the markets. But according to Marc Chaikin, founder of our corporate affiliate Chaikin Analytics, this bull market is nowhere near reaching its end. Stocks have more room to run... In today's Masters Series, adapted from the May 17 and June 21 issues of the free Chaikin PowerFeed daily e-letter, Marc explains why many investors are afraid to put their money to work right now... details how hiding your money in cash is a huge misstep... and reveals how you can navigate this bull market moving forward...
Now Is Not the Time to Bail on the Bull Market By Marc Chaikin, founder, Chaikin Analytics Folks, it's easy to get distracted by negative news... After all, there's a lot going wrong in the world. Fighting continues in the Middle East. And the conflict is ongoing in Ukraine. Beyond that, tensions between the U.S. and China are high. And despite the improving economy, many consumers feel like things are terrible right now amid today's high interest rates. Put simply, the negative narratives out there can feel overwhelming. But folks, the data is dramatically different from that. That's especially true in the stock market. In fact, signs point to the possibility that we're in the early innings of a runaway bull market. But that doesn't mean you can throw caution to the wind. Today, I'll use the Power Gauge to explain what I mean...
| Recommended Link: | |  'Nvidia Investors May Hate Me for Saying This...' There's a massive shift playing out in U.S. stocks – one we've only seen a dozen times before, going all the way back to 1943... And now one Wall Street veteran is warning it'll impact every major stock you can think of, especially Nvidia. On June 26, he shared where the stock market's going next... what it could mean for your money in 2024... and the No. 1 investing strategy he's now recommending if you want to protect and grow your wealth in 2024. | | |
After a brief pause, the market is making another big move higher. The S&P 500 Index is up 4% over the past month. We're talking about roughly six months' worth of the index's typical gains in a single month. Meanwhile, the tech-heavy Nasdaq 100 Index has soared about 9% over the past month. Despite some small pullbacks, both indexes have kept making record high after record high this year. Put simply, it's looking like we're in a runaway bull market. And it's clear on the chart. Take a look... So far in 2024, the broad market S&P 500 has gained an incredible 15%. And the Nasdaq 100 is up about 19%. Folks, we have to keep this in perspective when we see negative news. Many people feel bad about the state of the world. That's their right to feel that way. I'll also acknowledge that across the globe, terrible things are happening – and many folks are struggling. But there's no getting around the fact that the markets are soaring. What's more, interest rates have come down from the peak... The yields on some money-market accounts are still above 5%. That means any cash you have in the bank is earning more than it has in decades. Our goal is to make money. But we don't want to just sit on the sidelines in cash. The current high-rate environment has fooled some investors into thinking that sitting on the sidelines is making money. But the truth is, that's a huge mistake... Before I go on, I need to make one thing clear... Chaikin Analytics explicitly does not give individualized investment advice. We're legally not allowed to do that. And the amount of cash you keep on hand is a highly personal number. We can talk generally, though... Every investor should have a "sleep well at night" baseline. We should all have a specific amount of cash on hand to pay any expenses if our primary income stream dries up. You don't want to be forced to liquidate your holdings in the middle of a personal financial crisis. And in that situation, you certainly don't want to just hope for the best price. Now, with that said, we can get to the important question... Should you have excess cash as an asset in your investment portfolio? Obviously, cash pays well today. That's what it seems like on the surface, at least. But in the larger context of the market environment, it's not as good as it seems... The financial world is full of competition for your money. Sure, interest rates are still high today. But as I mentioned earlier, stocks are soaring as well. The S&P 500 is up around 24% over the past year. The tech-heavy Nasdaq 100 Index is up nearly 32% in that span. And of course, many individual stocks are doing even better. Folks, we're talking about massive returns. Those types of returns can help us build huge retirement accounts. If you're younger than 50 years old, you need to be growing your assets significantly so you can live comfortably in your later years. That's the point of investing for retirement. It's not good enough to sit on the sidelines in cash... Sitting on cash is effectively choosing not to grow your retirement funds. Even worse, the 5% yield on your savings doesn't look so big when you account for "real" interest rates... Real interest rates are simply the returns you make on your money after factoring in inflation. That's incredibly important because cash in the bank is always losing value. In the U.S., inflation doesn't seem too bad at first. Even today, it's only a bit over 3%. But over the longer term, the math of our situation becomes unavoidable... If you have $100,000 in cash and inflation is at 3%, sitting on the sidelines costs you $3,000. So even with a yield of 5%, your "cash asset" only makes $2,000 for the year. Folks, that's not an investment. Meanwhile, just putting your money to work in the broad market would've turned your $100,000 into roughly $129,000. And it could've been much better with other investments. I hope it's obvious by now... Cash isn't an investment. Instead, it's a tool. It's the liquid money we keep on hand to buy goods and services. Everyone's situation is different. But we all need to hold enough cash to handle any personal financial crisis. The stock market is how we really grow our retirement accounts. With that said, this doesn't mean to run out and just buy anything... Take a look at the Power Bar ratings below for the S&P 500 and the Nasdaq 100. In our system, we use the SPDR S&P 500 Fund (SPY) and the Invesco QQQ Trust (QQQ) to measure those, respectively. And here's what the Power Bars look like... In both cases, the majority of the stocks in these funds earn a "neutral" or worse rating from the Power Gauge. That means that just a select few stocks are responsible for this rally. That means differentiating between the "good" stocks versus the "bad" stocks is more important than ever. More specifically, you want to make sure you're in the "bullish" names... and avoiding the "bearish" ones. Good investing, Marc Chaikin
Editor's note: U.S. stocks are at their most concentrated levels ever. And that has big implications for some very specific segments of the market going forward. That's why Marc recently shared the details of his next big prediction... No matter how you've fared in the markets in the past few years, he says it's all on the line today as we approach a huge monetary shift that most investors aren't paying attention to right now. Marc just went on camera to share an investing strategy that could make you bigger gains than anything he has ever used the Power Gauge for before to prepare for this market shift. Catch up on the full details here... | 
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