My wife and I began house-hunting recently.
I was so happy to see how excited she was when we looked at what I thought was the ideal home last weekend.
“It’s the perfect house” she said… “but on a busy street.”
Trying to have a conversation in the yard seemed near impossible with the traffic. If you live on a busy street, you’ll want to block out the noise. Evergreen trees are perfect for that. They are the type that stay green all year round and are particularly effective at absorbing unwanted sound.
You can count on them to stand tall and mute out the clatter.
“Patience pays off” I kept reminding myself. Either we’d have to wait to find the perfect house, or we’d have to take the near-perfect house and wait for the evergreens to grow lush. Clearly tending a row of trees takes longer than finding the flawless home. I tend to be more patient than my wife so that didn’t bother me.
But either way- patience was in order.
Waiting is just part of the game…
Crafting a great stock portfolio should be the same way. You need patience and a mind to blocking out noise.
And while media distractions seem to never end, noisy markets can cause investors to lose focus. To be successful, one must mute the racket and follow the Big Money.
And there’s plenty of loud banging going on right now.
Big Money Selling Is Slowing
Markets finished September like they often do – in the red. The S&P 500 (SPY ETF) fell 3.74% last month.
Last week we discussed how there tends to be an election trade every four years. The Big Money usually dumps stocks heading into election day.
You can see that in the Big Money Index below:
But, signs are pointing to some stabilization in our data. In other words, selling appears to be slowing. We can see that above with the BMI trying to plateau. And when selling slows, it can make room for buyers to take the reins.
Nearly a month after the Animal Spirits came by way of frothy ETF buying, markets have pulled back nicely. The S&P 500 (SPY ETF) is down 6% since then. But, last week we finally saw decent selling in ETFs. It wasn’t huge, but it does appear that most of those sellers are gone.
You can see recent ETF selling in red off to the right:
I’ll zoom in on the red bars. Those are recent days when more ETFs were sold. Prior to last week, we haven’t seen any notable selling in ETFs since March:
It looks like most of the noise may be behind us near-term. There will still be gyrations between now and election day. But for now, we believe buyers are trying to plant their foot.
If only there were evergreen trees to put in our portfolios to help with these distractions…oh there are!
Believe it or not, there are outlier stocks making new highs.
Put Evergreen Trees In Your Portfolio
At the end of the day, the mission at MAPsignals is to find the best stocks out there, period. We are talking about the kind that are in bloom year after year. Basically, I’m talking about the evergreen trees in the market.
They are the juicers. You know, the ones that seemingly defy gravity over the long-term.
And there’s an easy way to catch them. You gotta follow the Big Money.
And while markets are twisting and turning, like now – these outliers do what they do. They all go up.
Like Trade Desk, Inc. (TTD):
And SolarEdge Technologies, Inc. (SEDG):
And that’s what MAPsignals uncovers, the seeds of the next huge evergreen trees in the market. These multi-bagger-winners didn’t happen overnight. All of that evergreen you see above are the times each of these stocks were on our Top 20 report.
Tomorrow’s market red woods can be found there.
Over time, those stocks are unphased by the market noise.
And once you get a few of these in your portfolio, they’ll keep reminding you that “patience pays off.”