Many stocks fell yesterday, ostensibly on “rotation.” How predictable. But smart investors use the noise as a gift to snap up shares in great companies when they’re “on sale” – while everybody else overthinks things, advises Keith Fitz-Gerald, editor of 5 With Fitz.
People talk about rotation like it’s some sort of magic pill. It’s not. Heck, it’s not even “rotation.”
What’s really happening is that short-term traders have enjoyed a big run up lately, so they’re: A) taking profits and B) rebalancing risk. It’s big money traders simply repricing risk and slapping a Wall Street label on herd behavior, so nobody has to admit that’s what it is.
(Editor’s Note: Keith is speaking at the 2026 MoneyShow Masters Symposium San Francisco, scheduled for Aug. 25-28. Click HERE to register.)
Invesco QQQ Trust (QQQ)
Data by YCharts
Do not let the headlines convince you otherwise. This happens every time the markets run hot and on increasingly shorter time frames. Somebody needs a reason, so they invent one.
Smart investors know better. Owning a thousand names to “spread your risk” sounds great in theory – but what most investors fail to realize is that doing so increasingly buries your winners under a mountain of stocks that may never be going anywhere in the first place.
The world is reorganizing itself around themes and in ways that don’t respect Wall Street’s old categories. Invest accordingly.
