The Danger of Buying Last Year's Winners

Last year's worst performers are now leading the charge. The script has flipped. And this shift illustrates a crucial lesson... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [DailyWealth] The Danger of Buying Last Year's Winners By Brett Eversole --------------------------------------------------------------- 2022 was a unique year... uniquely painful, that is. Just about everything went down. Stocks fell nearly in unison, both in the U.S. and around the globe. Bonds followed suit. And most commodities took a wild ride, too. Despite that, 2022 had clear winners and losers. But last year's script has flipped so far in 2023. Some of the worst performers are now leading the charge. And this change illustrates a crucial lesson: Last year's winners rarely keep winning. Let me explain... --------------------------------------------------------------- Recommended Links: [Here's What We're Watching Today (Live at 11 a.m. Eastern Time)]( It has only appeared in the market twice in the past 50 years. And you could have made a 424% gain on the LOWEST-risk investment available the last time we saw it. This is why Stansberry Research's longest-tenured analyst calls it "THE biggest – and perhaps most obvious – setup I've seen in my entire career." [Click here by 11 a.m. Eastern time for details](. --------------------------------------------------------------- [BUY ALERT: United Natural Foods (UNFI)]( This company is up 588% over the past three years and just flipped back into BUY mode. But before you consider buying a single share, you must understand the reason why this is happening now. [It's 100% free to get all the details on this page right here](. --------------------------------------------------------------- Investing is anything but simple. The problem is, our brains are wired for simplicity. Being able to make quick judgments about the world is great for survival... But in the world of investing, it can cause folks to make big mistakes. One of these blunders is blindly assuming that what just happened will keep happening. Yes, trends matter. They're a powerful tool for making investment decisions. But you've got to keep a close eye on the trend... because every trend eventually reverses. And it's occurring in stocks right now. To see what I mean, let's look at how each U.S. sector performed last year... The overall market fell 18.1%. But some sectors did much better... and some did much worse. Energy stocks soared an incredible 65.4%. Utilities were slightly positive as well. Meanwhile, four sectors each dropped by 26% or more. Today, the market has reversed course. Stocks are up 3.4% year to date. But the winners driving that rally have completely flipped. Take a look... Last year's three worst performers are the top three best performers this year. And the top four from last year now make up the bottom four. It's practically a complete reversal from top to bottom. We can see the same phenomenon at a broader level. The Dow Jones Industrial Average and its "old school" stocks performed relatively well in 2022... while the growth-focused, tech-heavy Nasdaq Composite Index fell the most. But again, it's the complete opposite so far in 2023. Take a look... Today, the two indexes have swapped places. The beaten-down Nasdaq is leading the pack. It has jumped nearly 9% in two months. Meanwhile, the Dow is down slightly. These examples highlight the dangers of blindly assuming – without any data – that the trend will continue. It might happen... But then again, it might not. The message is clear: You can't afford to get complacent as an investor. You can and should stick with trends. But when the trend changes course, you need to pivot too... That means you're never stuck holding and hoping. You're never married to a trade. And that's how you can consistently produce outsized gains. Good investing, Brett Eversole Further Reading "Most folks simply watch the S&P 500's movements to get a feel for how the market is doing," Brett writes. But sometimes, if you want to know whether the market is healthy, you need to look deeper. Recently, an important move took place under the surface... [Learn more here](. Mom-and-pop investors are getting less fearful in 2023. If you're a contrarian investor, that might worry you. But sentiment still has a long way to go before we see another peak in stocks... [Get the full story here](. --------------------------------------------------------------- [Tell us what you think of this content]( [We value our subscribers' feedback. To help us improve your experience, we'd like to ask you a couple brief questions.]( [Click here to rate this e-mail]( You have received this e-mail as part of your subscription to DailyWealth. If you no longer want to receive e-mails from DailyWealth [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. For questions about your account or to speak with customer service, call 888-261-2693 (U.S.) or 443-839-0986 (international) Monday-Friday, 9 a.m.-5 p.m. Eastern time. Or e-mail info@stansberryresearch.com. Please note: The law prohibits us from giving personalized investment advice. © 2023 Stansberry Research. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Stansberry Research, 1125 N Charles St, Baltimore, MD 21201 or [www.stansberryresearch.com](. Any brokers mentioned constitute a partial list of available brokers and is for your information only. Stansberry Research does not recommend or endorse any brokers, dealers, or investment advisors. Stansberry Research forbids its writers from having a financial interest in any security they recommend to our subscribers. All employees of Stansberry Research (and affiliated companies) must wait 24 hours after an investment recommendation is published online – or 72 hours after a direct mail publication is sent – before acting on that recommendation. This work is based on SEC filings, current events, interviews, corporate press releases, and what we've learned as financial journalists. It may contain errors, and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility.