How to Ride the Equities Wave in Winning Sectors

01/19/2018 5:00 pm EST


Mike Larson

Editor, High Yield Investing

I still believe the real danger lies in over-weighting bonds…while the real opportunity is in stocks that too many investors have all but ignored for years now, writes Mike Larson, senior analyst at Weiss Ratings.

I love it when a plan comes together!

The stock market has started 2018 off with a bang, just as I’ve been predicting — and just as I’ve been positioned for in my High Yield Investing service. As a matter of fact, more than half of the positions I’ve recommended are showing double-digit open profits – including one with gains of more than 42% since June! All but two of the remainders are trading in profit territory.

As for the market overall, I think that’s also the case – though it’s highly likely it will pause to catch its breath soon.

Look, way too many pundits have been bellyaching about this rally for almost two years now. But my colleagues have pointed out on multiple occasions that massive waves of “flight capital” are washing up on our shores from more-troubled foreign locales. Much of that money is pouring into stocks. Plus, I’ve said for more than a year now that individual investor funds would finally rotate out of massively overvalued Treasuries and other bonds, and find their way into stocks as well.

Those calls have been 100% spot on! And you know what? I still believe the real danger lies in over-weighting bonds … while the real opportunity is in stocks that too many investors have all but ignored for years now.

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You simply don’t want to miss out on the powerful gains available in sectors like defense, high-yielding dividend payers, industrials, travel/leisure, technology, financials, and more. Heck, I even highlighted energy just two weeks ago – and that sector is now exploding higher!

If you really want to zero in on the short term, you can easily make a case that stocks are extended. After all, the Dow Jones Industrials (DJIA) blew through 24,000 in late November, then 25,000 earlier this month, then 26,000 last week. You don’t want to just throw money willy-nilly at the market until it cools off a bit.

But if you’re a long-term investor? Continue to follow the advice I’ve been dishing out for the last couple of years: Ride this market wave with investments in winning sectors and sector ETFs, as well as stocks that earn high grades from our Weiss Ratings.

And make sure you don’t jump off until I…and the proprietary, impartial, fact-based indicators my firm produces … tell you it’s time to!

Until next time,

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