A Tale of Two Investors, Which One Are You?

[Zacks | Our Research. Your Success.] WeekendWisdom Tactics that Work in Good Markets and Bad [Kevin Matras - Editor] A Tale of Two Investors, Which One Are You? By: Kevin Matras April 6th, 2024 --------------------------------------------------------------- Stocks have been on a tear this year. The S&P is up more than 9%, and we're only at the beginning of April. And this comes on the heels of a spectacular year last year when the S&P gained more than 24%! It's been a spectacular rally so far. And it looks like there's a lot more upside to go. Gladly, there are plenty of investors handily beating the market. But too many are underperforming. One of the reasons why so many people are not seeing the kinds of returns they want is because they don't know of new stocks to get into. We all know of the Magnificent 7 (which is on the verge of becoming the Magnificent 6, or even 5). But what about beyond that? They find themselves in mediocre stocks because they don't know of anything better instead. I think for some, their knowledge or 'universe' of familiar stocks is relatively small and this limits their opportunity of getting into better ones. Which Half Are You In? While 68% of the companies in the S&P are showing positive returns YTD, less than half (only 39%) are actually beating the index this year. That means 61% of the stocks in the S&P are underperforming the market, with nearly one third showing a negative return. Even 'good' companies like Apple; they're down -11.9%. Or Biogen; which is down -20.3%. Or Tesla; down -32.2%. So what gives? I don't single these out so you can feel bad if you have them. But instead, to stop and think about 'why' you have them. Nobody invests so they can underperform the market. But if you are -- why? You don't have to. If you're underperforming the market, that means you have more of these types of laggards in your portfolio than leaders. How the Other Half Lives Of course, there are a lot of big names beating the S&P too. Take Oracle, or Eli Lilly, and we can't forget NVIDIA for example. All are outperforming the S&P with gains of +19%, +33% and +79% respectively. But now let's move outside of the S&P. Did you ever hear of a company called Applovin? What if you did? It has outperformed the market by gaining +82.8% since the start of the year. Or GigaCloud? They're up +83.6%. Or Entera? Up by +217%. (By the way, these are all Zacks Rank #1 stocks.) There are hundreds and hundreds of stocks producing fantastic gains that many people may never have even heard of. What about you? How many times have you heard about a stock or read about a stock that skyrocketed -- only to think to yourself; "if only I knew about that stock ahead of time, I would have been in that." Continued . . . [Alert: Buy These Ultimate Four Stocks Monday Morning]( There's still time to get in early. These aren't just 4 promising stocks. They were handpicked from hundreds of strong companies by Zacks' experts because they present the greatest upside for Q2: Stock #1: Breakthrough company made an early investment in AI to customize online education experiences. No wonder analysts have jumped their growth estimates to +130% -- just in one quarter! Stock #2: From garage doors to ceiling fans, don't let those non-glamorous products fool you. Profits are skyrocketing due to consistent product demand, improving margins, strong macro trends, and a great technical picture. Stock #3: Obesity levels have risen 300% over the past 50 years. Our chosen pharma stock is not one of the giants. So it's a TAKEOVER TARGET in a market expecting explosive growth in the next 6 to 12 months. Stock #4: Join the AI frenzy as this U.S. company piles up a record-high product backlog and spreads to 130+ countries. It has many research and development partnerships with semiconductor companies, including the beloved NVIDIA. Deadline to download our just-released Ultimate Four Special Report is midnight Sunday, April 7. [See Our "Ultimate" Stocks Now »]( Expand Your Universe and Pick Better Stocks Increasing your knowledge and awareness of new and better stocks is easier than you think. And you don't have to reinvent the wheel. For example, since 1988, the Zacks Rank #1 Strong Buy stocks have beaten the S&P 500 in 28 of the last 35 years, with an average annual return of 24% a year. That's more than 2 x the S&P with an 80% annual win ratio. That includes 4 bear markets and 4 recessions. And when doing this year after year, that can add up to a lot more than just two times the returns. Stick with the top industries. Since roughly half of a stock's price movement can be attributed to the group that it's in, you'll significantly increase your odds of success by focusing on the best groups. By how much? Our tests have shown that the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of 2 to 1. And the top 10% of industries outperform the most. And did you know that stocks with 'just' double-digit growth rates typically outperform stocks with triple-digit growth rates? Or that stocks with crazy high growth rates test nearly as poorly as those with the lowest growth rates? One explanation for this is that sky high growth rates are unsustainable. And the moment a more normal (albeit still good) growth rate emerges, the stock gets a dose of reality as well. For example, a company earning 1 cent a share that is now expected to earn 6 cents, has a 500% growth rate. But, if it receives a downward estimate revision to 5 cents, that's a significant drop. Even though it still has a 400% growth rate, the estimates were just reduced by -16.7% and the price is likely to follow. If you've ever wondered how a stock with a triple-digit growth rate could possibly go down -- that's how. Once you know what to look for, and how to pick better stocks, it can transform your portfolio. Stock Picking Secrets of the Pros Picking better stocks and making better decisions is a lot easier when there's a proven, profitable way to do it. And one of the best ways to do that is to see what stocks the pros, who use these methods, are picking. Whether you're a growth investor, or a value investor, prefer fast-paced momentum stocks, or mature dividend-paying income stocks, there are certain rules the experts follow to maximize their gains. This applies to large-caps and small-caps, biotech and high-tech, ETFs, stocks under $10, stocks about to surprise, even options, and everything in between. Regardless of which one fits your personal style of trade, just be sure you're following proven profitable methods and strategies that work, from experts who have demonstrated their ability to beat the market. The best part about these strategies and stock picks is that all of the hard work is done for you. There's no guesswork involved. Just follow the experts and start confidently getting into better stocks on your very next trade. What The Pros Are Picking In Q2 Using the market-doubling Zacks Rank as a foundation, our experts have hand-picked 4 stocks poised to outperform this quarter. And today, we're revealing these high-potential recommendations to our readers: Stock #1: Breakthrough company made an early investment in AI to customize online education experiences. No wonder analysts have jumped their growth estimates to +130% -- just in one quarter! Stock #2: From garage doors to ceiling fans, don't let those non-glamorous products fool you. Profits are skyrocketing due to consistent product demand, improving margins, strong macro trends, and a great technical picture. Stock #3: Obesity levels have risen 300% over the past 50 years. Our chosen pharma stock is not one of the giants. So it's a TAKEOVER TARGET in a market expecting explosive growth in the next 6 to 12 months. Stock #4: Join the AI frenzy as this U.S. company piles up a record-high product backlog and spreads to 130+ countries. It has many research and development partnerships with semiconductor companies, including the beloved NVIDIA. [Download our just-released Ultimate Four Special Report]( You can be one of the first to see these promising recommendations when you download this Special Report today. Opportunity ends at midnight Sunday, April 7. [See our Ultimate Four stocks now »]( Thanks and good trading, [Kevin Matras - signature] Kevin Kevin Matras serves as Executive Vice President of Zacks.com and is responsible for all of its leading products for individual investors. He invites you to [download Zacks' just-released Ultimate Four Special Report before this weekend's deadline](. This free resource is being sent by [Zacks.com](). We look for investment resources and inform you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms of Service". Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. 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