Don't Put 30% Down on Your First Hand

Most of us wouldn't go into a casino and put 30% of our money on the first hand... [Chaikin PowerFeed]( Don't Put 30% Down on Your First Hand By Karina Kovalcik, senior quantitative analyst, Chaikin Analytics Most of us wouldn't go into a casino and put 30% of our money on the first hand... But when you're "passive" about your investing, that's exactly what you're doing. You see, many exchange-traded funds ("ETFs") are passive. You don't have to select the stocks yourself or worry about rebalancing. Instead, the ETF puts together the basket of stocks for you. But as I'll explain today, in most cases, you're actually making an "active" bet on size and momentum. That's because many ETFs select stocks based on a simple set of rules... Recommended Links: ['War? Here's how to protect your assets NOW!']( The global order is in chaos. And according to Dan Ferris, the "pin prick" that pops the biggest asset bubble in history could now be here, too. That means if you don't take action today, your wealth could decline by 40%... 50%... or more, very quickly. (Yes, even your cash savings.) [Here's his crystal-clear game plan for what to do](. [Buy this oil stock BEFORE Russia's next move]( Stocks are plummeting after Russia's invasion of Ukraine. The shutdown of a major energy pipeline to Russia could create a historic shock in oil prices and send oil stocks soaring. But do NOT buy Chevron or ExxonMobil. Instead, this small Texas oil stock could make you 100%-plus if you get in immediately, before the oil crisis escalates. [Click here for the full details](. One of the easiest sets of rules is "market capitalization weighting." That's when the biggest stocks make up the largest share of an index or ETF's holdings. This set of rules can lead to trouble for investors, though... For example, at the end of 2021, technology stocks made up nearly 30% of the market-cap-weighted S&P 500 Index. So if you only invested in an S&P 500-tracking ETF, like the SPDR S&P 500 Fund (SPY), tech stocks would've made up almost a third of your portfolio. Maybe you didn't actively choose to be invested 30% in the tech sector. But that's the passive bet you made. And as I showed you on January 27, that proved dangerous as tech stocks sold off. This problem can pop up in your portfolio in other, less obvious ways as well... Let's assume you read my essay and realized you were overweight tech giant Apple (AAPL). So you sold some AAPL shares to reduce your risk. You think you're in the clear, right? Wrong. If you're investing with passive accounts, your portfolio includes "sleeper agents"... Check the holdings of your retirement accounts. If they hold a large percentage of the most popular ETFs, like SPY or other index-tracking funds, you could be overweight some big companies today. For example, here are SPY's top 10 holdings as of mid-February... [Chaikin PowerFeed] Just by investing in SPY, your portfolio has already inched you a lot closer to overweight Apple than you might've realized. So you could be taking on more risk than you want. Now, that isn't a bad bet to make if it works out. But it's important to understand that passive ETFs can lead you into a highly concentrated bet on a small handful of companies. You should be aware of that risk so you don't get surprised down the road. Make sure your accounts – including the "passive" ones – haven't led you into an active, oversized bet. The bottom line is that you want to always know and understand what bets you're making as an investor. You never want to go in and throw 30% down on the first hand. Good investing, Karina Kovalcik Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 -0.40% 4 22 4 S&P 500 -0.25% 84 347 67 Nasdaq +0.30% 9 72 17 Small Caps +0.35% 253 1092 527 Bonds +2.19% Energy +2.47% 18 3 0 — According to the Chaikin Power Bar, Small Cap stocks are more Bearish than Large Cap stocks. Major indexes are mixed. * * * * Top Movers Gainers [rating] SEDG +14.93% [rating] OXY +12.88% [rating] ENPH +8.44% [rating] LHX +8.05% [rating] NOC +7.93% Losers [rating] EPAM -45.68% [rating] VTRS -24.28% [rating] XRAY -7.75% [rating] IPGP -5.58% [rating] PPG -5.44% * * * * Earnings Report Reporting Today Rating Before Open After Close AZO, HRL, SJM CRM, HPE, ROST, TGT DPZ No earnings reporting today. Earnings Surprises [rating] ZM Zoom Video Communications, Inc. Q3 $1.29 Beat by $0.22 [rating] WDAY Workday, Inc. Q3 $0.78 Beat by $0.07 [rating] SBAC SBA Communications Corporation Q4 $0.90 Beat by $0.08 [rating] OKE ONEOK, Inc. Q4 $0.88 Beat by $0.07 [rating] HPQ HP Inc. Q1 $1.10 Beat by $0.08 * * * * Sector Tracker Sector movement over the last 5 days Energy +3.72% Utilities +2.58% Health Care +1.92% Industrials +1.58% Communication +1.54% Information Technology +1.07% Real Estate +0.87% Materials -0.57% Discretionary -1.43% Staples -1.47% Financial -1.78% * * * * Industry Focus Innovative Technology Services 5 45 36 Over the past 6 months, the Innovative Technology subsector (XITK) has underperformed the S&P 500 by -26.09%. Its Power Bar ratio, which measures future potential, is Very Weak, with more Bearish than Bullish stocks. It is currently ranked #16 of 21 subsectors. Indicative Stocks [rating] GDRX GoodRx Holdings, Inc [rating] COUP Coupa Software Incor [rating] TWTR Twitter, Inc. * * * * Chaikin Analytics LLC is not registered as a securities broker-dealer or advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Chaikin Analytics does not recommend the purchase of any stock or advise on the suitability of any trade. The information presented is generic in nature and is not to be construed as an endorsement, recommendation, advice or any offer or solicitation to buy or sell securities or any kind, but solely as information requiring further research as to suitability, accuracy and appropriateness. Users bear sole responsibility for their own stock research and decisions. Read the full disclaimer at [(. You have received this e-mail because you subscribed to PowerFeed, published by Chaikin Analytics. To stop receiving PowerFeed daily, click to [unsubscribe](. For questions about your account or to speak with customer service, call +1 (877) 697-6783 (U.S.), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Chaikin Analytics 1500 JFK Blvd Suite 220 Philadelphia, Pennsylvania 19102 United States +1 (877) 697-6783