Steer Clear of the S&P 500

If you believed the market was about to rally, where would you invest? The S&P 500? That’s what most investors would do. But I’d advise you NOT to do that. Here’s what I’d advise instead. [mbd-thumbnail] CLICK HERE TO LAUNCH VIDEO OR READ THE FULL TRANSCRIPT BELOW »» [/mbd-thumbnail] [mbd-video][/mbd-video] [ad] ADVERTISEMENT REVEALED: The most […] You’re receiving this email as part of your subscription to Andrew Zatlin’s Moneyball Daily [Unsubscribe]( [Moneyball Daily] Steer Clear of the S&P 500 September 29, 2023 If you believed the market was about to rally, where would you invest? The S&P 500? That’s what most investors would do. But I’d advise you NOT to do that. Here’s what I’d advise instead. [CLICK HERE TO LAUNCH VIDEO OR READ THE FULL TRANSCRIPT BELOW »»]( ADVERTISEMENT REVEALED: The most dangerous man in America... A powerful man unbeknownst to most Americans is about to change the course of history… It's not Joe Biden, Donald Trump, or any other politician. In fact, this person has never run for or held elected office. Most people wouldn't know him if they bumped into him on the street. But on December 13 at 2 p.m. Eastern time, this man is set to make a statement. A declaration that could send shockwaves through our financial system... and instantly change the trajectory of more than $5 trillion in American money. While most people will be blindsided by this statement… you have a unique opportunity. A chance to prepare for this event… to be on the right side of history… and potentially coming out wealthier than you ever thought possible. To find out what you need to do to prepare, [click here to get the full story](. For a transcript of this video, see below. This transcript has been lightly edited for length and clarity. Steer Clear of the S&P 500 [Back in August]( I made a prediction: I said September was going to be bad for the market… But October would bring a much-needed rally. Well, just as I told you, the S&P is down this month — it’s down 4% in September. Fortunately, good news is still in store for October. Let me tell you why, and how to position yourself to profit. A Misleading Month To set the stage, let’s look at why September has been so dismal. A lot of “experts” might tell you the reason is simple: The market was overbought. But that’s not entirely true. You see, the broader market wasn’t overbought. A handful of key stocks were. And these stocks, for better or worse, seem to control the entire market’s rise and fall. You’ve undoubtedly heard of these companies. I’m talking about the big tech names like Meta (META), Nvidia (NVDA), Apple (AAPL), and Microsoft (MSFT). This small handful of stocks makes up 25% of the total value of the stock market. So when they climb, the broader market does, too. And when they fall, you guessed it, so does the market. This “live by the sword, die by the sword” situation is exactly what we’ve been experiencing. Let me show you… Tech Giants Take a Tumble Take Apple, for instance. A six-month snapshot of its stock performance is shown below: Apple stock soared 25% throughout the spring and summer. But over the past month, it’s fallen 14%. Essentially, tech giants like Apple, Microsoft, and Nvidia have fallen back to earth in recent weeks. And they’ve dragged the entire market down with them. At first blush, this might seem like a major problem for stock-market investors. But as it turns out, this situation offers us intriguing investment opportunities… Buy the Sector, Not the Market Let me take this time to clarify my prediction: I don’t think the entire market is going to rally next month. I think the rise will be contained to a few key sectors. Here’s why… I expect this rally to be triggered by three factors: The first is the positive trends around company’s finances. What I mean is that consumers are continuing to spend, companies’ top lines have been fairly steady, and now their bottom lines will start to improve. Take wholesale club Costco (COST), for example. This company recently released earnings that were relatively flat. But profits were up considerably. How come? For one reason, wage growth went from 5% last year to less than 4% this year. Simply put, the cost of labor has dropped. For another reason, producer prices have fallen. They started the year at a 5% year-over-year growth rate. Now they’re down to 1%. Simply put, companies are spending less on goods — a great sign for that bottom line. As for the second factor… Lean and Mean For much of this year, companies focused on getting lean. They trimmed costs, staff, and inventories. They knew times might be tough and tried their best to stick to a conservative game plan. Here’s a look at business inventories, for example: As you can see, companies have been de-stocking, getting rid of unnecessary inventory. Only now they’ve trimmed too much fat! They need more inventory. And they have money to burn because they didn’t spend it earlier in the year. In the case of a lot of companies, it’s not just money that can be spent, it’s money that has to be spent. Companies need to spend a certain amount by the end of the year, otherwise they’ll lose those funds in next year’s budget. This push to spend will increase economic activity — another rally-maker. Now, about that final factor… Bonus Season is Here Imagine you’re a money manager. Bonus season is right around the corner. So, you want to lock in your profits now to get as big of a bonus check as you can. Sure, throughout the year you probably made money on Apple and Nvidia. But those trades are overcrowded now. And as we saw earlier, their performance recently took a step back. You need to take your investment dollars and put them elsewhere. And your focus should be on fundamentals. There’s going to be a mad rush out of high-tech, and into certain sectors — specifically, those poised to benefit from any kind of uptick in economic activity. If you’re a Pro subscriber, I’ve got a specific idea that could deliver gains as high as 50% over the next year. We’re in it to win it. Zatlin out. FOR MONEYBALL PRO READERS ONLY > [LEARN MORE]( < In it to win it, [Andrew Zatlin] Andrew Zatlin Moneyball Economics Copyright 2023 © Moneyball Economics, All rights reserved. You signed up on []( Our mailing address is: Moneyball Economics 1125 N. Charles Street Baltimore, Maryland 21201 [Update Subscription Preferences]( | [Unsubscribe from this list]( | [Terms & Privacy]( RISK NOTICE: All investing comes with risk. That includes the investments teased in this letter. You should never invest more than you can afford to lose. 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