Whatever You Do… Don’t Fall For This Silly Argument!


As an individual investor, there are two things you NEED to focus on:1) Ride bull markets for as long as possible.2) Get out of stocks once a bear market hits. depositphotos If you do this, you WILL get wealthy from investing over time. I bring this up, because I’m seeing more and more analysts arguing that the bull market is about to end and that a raging recession will crater stocks.I don’t see what they are seeing. If anything, stocks look ready to go to new highs of 5,800 or even higher by year end. Please note, I’m not saying there won’t be dips and corrections along the way… I mean that this is a bull market, and if anything it’s getting stronger.One of the primary criticisms of this bull market is that it’s being driven by just a handful of stocks: the big tech plays like Amazon, Alphabet, Nvidia, etc. Meanwhile, the other 495 stocks that comprise the S&P 500 are trailing behind.This actually makes perfect sense. The big tech companies are the most profitable companies in history. Collectively, Amazon, Nvidia, Microsoft, Meta, and  Alphabet generated $116 BILLION in cash flow in 1Q24.That’s roughly $1.28 BILLION in cash flow… per day.Again, there’s a reason by the big tech companies lead the market: they’re the largest, most profitable companies in history.  They should lead the market!The key item is whether the rest of the market plays “catch up” or if big tech rolls over. And throughout this bull market begun in October 2022, the rest of the market has played “catch up.”Take a look at the first leg higher from October 2022 to June 2023. At that time, the regular S&P 500  which is heavily weighted towards tech and is represented by the black line in the chart below dramatically outperformed the equal weighted S&P 500: a version of the S&P 500 in which each company receives 1/500th weighting as represented by the blue line in the chart below.Then, just like now, stock market bears and misguided gurus were out proclaiming that the stock market was about to collapse because it was “held up by only a handful of stocks.”  Then the rest of the market played “catch up” and the market roared to over 5,000 within eight months.  So again, the fact that big tech is leading the market… and makes up the bulk of its gains isn’t necessarily a BAD thing. If the rest of the market plays catch up… as it tends to do… the bull market will continue MUCH LONGER than most analysts expect.Remember, as investors, our job is to make money, not look for any excuse to dump stocks and panic about something bad happening. And as I’ve outlined in recent articles, this means riding bull markets for as long as possible, and then side-stepping bear markets when they eventually hit.In the very simplest of terms, you need to be invested in stocks, until an objective, verifiable tool (not your feelings or limiting beliefs) tells you it’s time to “get out.”More By This Author:The “Fix” Is In For The Economy Why Isn’t the U.S. Rolling Over Into Recession?Want to Get Rich From Stocks… Remove These Three Ideas From Your Mind

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