Government efforts to “flatten the curve” and thwart the advance of COVID19 has resulted in unprecedented unemployment.
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Yet, in the face of record unemployment, one sector is bucking the trend.
Success is all about recognizing where the strength is and where it’s not.
Today, Financials and Industrials continue to struggle, both sectors lag the overall market and couldn’t gain enough strength to participate in the market’s recent rally with losses more than 2X that of the S&P 500 Index.
So, are you buying the worst performers hoping they turn around? Or are you sticking with what’s working?
There are winners out there… Take a look at this industry group, where momentum is higher now than it was before the S&P peaked February 19th.
Online retail has taken the baton, leading the way higher. IBUY, the Online Retail Index ETF is trading at all-time highs.
And momentum, based on its 14 day RSI, is higher than it was at the high of the S&P of February 19, 2020.
A closer look at momentum shows the massive outperformance of Online Retail vs SPX, which is arguably the strongest index on the planet right now.
There are a lot of strong performers in this group of what can be called “stay at home stocks” – everything Netflix, Paypal and Amazon, to Stamps.com and Overstock.com
Use this list of IBUY’s top holdings to get you thinking about what’s working today.
At Rowe Wealth, we structure our rules based models to capture “winners” like these based on the amount of relative strength securities are showing.
This allows us to balance our clients accounts to target the greatest chances of outperformance, while avoiding weak securities that hold too much risk.
Balancing risk vs. reward is an incredibly important part of any investor’s playbook, and holding too much (or too little) risk can destroy your chances of profiting as a long term investor.
If you want to avoid the hassle of constantly trying to find the “winners” during times of volatility, you might benefit from having a firm like Rowe Wealth manage your portfolio for you.
If you currently hold a portfolio worth at least $500,000 you’re also eligible for a completely free evaluation. Simply click here to see available appointment times.
As always, invest wisely.
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