Don't Let the 'Big Picture' Fool You

Many investors began worrying about a market crash at the start of this year... And Russia's invasion of Ukraine in late February amplified those fears. [Chaikin PowerFeed]( Editor's note: The deep dive into our investment approach continues today... So far, Chaikin Analytics founder Marc Chaikin has talked about how the [most important lesson of his career]( and [the"magic key" he got from a co-worker in the 1980s]( both played pivotal roles in the Power Gauge's creation. Over the next two days, Marc will focus specifically on his "Industry Monitor" approach... Marc uses this strategy to help Power Gauge Investor subscribers uncover the "best of the best of the best" opportunities in the markets. And so far, it's working well... The S&P 500 Index is down significantly this year. And yet, folks who followed our advice in Power Gauge Investor have booked several double-digit winners over that period. Today's essay first appeared in the Chaikin PowerFeed on April 1. As Marc explains, we shouldn't worry about whether "the market" does "good" or "bad" today (or any day)... Don't Let the 'Big Picture' Fool You By Marc Chaikin, founder, Chaikin Analytics Many investors began worrying about a market crash at the start of this year... And Russia's invasion of Ukraine in late February amplified those fears. The S&P 500 Index lost as much as 13% from the beginning of 2022 through early March. That put the benchmark index in "correction" territory for the first time since the early days of the COVID-19 pandemic. And from there, things only got worse. It makes sense... Folks typically start to panic when the "overall market" falls. They ignore all the tidbits of news along the way. And they don't react until the declines start to make headline news. In other words, they're looking at what they consider the "big picture" in stocks. That's how most regular investors and the mainstream media think and talk about the stock market. They'll say that "stocks are up" or "the market is down" as if it's all one big entity. You'll notice that many folks swing from euphoria to panic depending on whether "the market" has a good or bad day, week, or month. They're wrapped up in their emotions as if it were a sporting event. But that's simply not the best way to invest. It's not the way most professional investors see the market. And it isn't how I've seen the market during my 50-year career, either... Recommended Links: [How to Put Guaranteed Income "Under the Tree"]( A regular guy from upstate New York recently came forward with his unique story of how he retired early at 52 all thanks to ONE single idea that anyone can use. He sees 16%-plus annual returns that are legally protected. And he never has to worry about a market crash – no matter what happens with politics or on Wall Street. [He explains everything from his own living room, right here](. [THIS WILL DEFINE MY LEGACY]( In this season of giving, Doc is reopening his original briefing on his No. 1 biggest discovery in 15 years at Stansberry Research (and more than four decades in the markets). He's already shown readers big double-digit gains since July. [Click here for the full details from Doc](. Plain and simple, the stock market isn't just one big thing. It's actually a multitude of different, smaller things. The market is made up of things like energy, materials, industrials, utilities, health care, financials, consumer discretionary, consumer staples, information technology, communications services, and real estate. And you can break these things into even smaller groups, too. The problem is that this breakdown creates a lot of moving pieces. That's why many regular investors just completely ignore the idea. Instead, they'll think of "the market" in terms of the S&P 500. And a lot of folks keep track of how the Nasdaq Composite Index is doing to know what's happening with "tech stocks." This mindset is also how most folks invest. They just buy stocks. They're more focused on individual company metrics like earnings reports, growth projections, and stuff like that. That's actually a big mistake. You see, investors could set themselves up for greater success if they followed a different approach... Studies have proven that 50% of a stock's performance can be attributed to its industry. 50%! That means choosing the right industry is literally half the battle when deciding which stocks to buy and which stocks not to buy. If investors know which industries are doing well and which ones are struggling, they can get a head start on finding the best opportunities. This mindset directed nearly all of my buying and selling decisions while I was on Wall Street. Whoever could see the biggest threats and opportunities in the market first – and correctly determine how they would ripple through specific industries – had a huge advantage. This was how billionaire investor George Soros looked at the market when I worked with him... He passed it down to the great Stanley Druckenmiller, who also worked with Soros before starting his own hedge fund. Even Bill Gross, the former manager of the biggest bond fund in the world, uses this approach. The famed Medallion fund does this as well. It's one of the most successful hedge funds of all time – if not the most successful. The Medallion fund has reportedly generated average annualized returns of roughly 66% before fees since 1998, delivering nearly seven times better returns than the overall market. What's Medallion's secret? The fund's managers don't pay attention to specific stock stories. Instead, they search for elusive patterns across specialized groups that regular investors simply aren't looking for. Medallion is pretty open about this secret to its success. My point is... This approach is how I learned to invest throughout my five decades in the business. And it's how I manage my own investments to this day. For the most part, I don't worry much about the overall market. I don't watch every move of the Dow Jones Industrial Average or the S&P 500. I almost exclusively track industries. But most investors are left in the dark when it comes to this approach... They're simply too focused on the hot stock pick of the day. And they've fallen into the "big picture" trap. Tomorrow, I'll explain how a specific set of tools helps me beat that trap. Good investing, Marc Chaikin Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 -1.14% 7 22 1 S&P 500 -1.22% 105 278 114 Nasdaq -1.32% 20 56 24 Small Caps -1.55% 391 1012 490 Bonds -0.59% — According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks are somewhat Bearish. Major indexes are mixed. * * * * Top Movers Gainers [rating] GNRC +5.58% [rating] TSLA +3.31% [rating] ILMN +1.08% [rating] DRI +0.78% [rating] BAC +0.74% Losers [rating] EQT -7.82% [rating] SEDG -5.87% [rating] LUV -5.16% [rating] APA -5.16% [rating] WYNN -5.03% * * * * Earnings Report Reporting Today Rating Before Open After Close No earnings reporting today. Earnings Surprises [rating] CALM Cal-Maine Foods, Inc. Q2 $4.07 Missed by $-0.11 * * * * Sector Tracker Sector movement over the last 5 days Utilities +0.07% Energy -0.35% Staples -0.48% Financial -0.79% Health Care -0.98% Real Estate -1.27% Industrials -1.69% Materials -1.73% Communication -2.24% Discretionary -4.37% Information Technology -4.90% * * * * Industry Focus Insurance Services 23 23 4 Over the past 6 months, the Insurance subsector (KIE) has outperformed the S&P 500 by +9.88%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #3 of 21 subsectors and has moved up 1 slot over the past week. Top Stocks [rating] AEL American Equity Inve [rating] HIG The Hartford Financi [rating] RGA Reinsurance Group of * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. 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