Remember to take the long view of your portfolio … how legendary investor Louis Navellier uses short-term moves to profit
I don’t claim to have any psychic powers, but I’m pretty sure I know what some of you are thinking.
What does this mean for my retirement?
Can I still afford to send the kids to college?
Wasn’t I just getting ahead for once?
Can I still afford that great vacation this summer?
I’m glad this week is over because watching the market was brutal.
The market got crushed. Portfolios took a beating. If you dared to log in to your account, you probably closed your eyes fast and wished you hadn’t.
Maybe you cursed, like the CEO of RH did during his earnings call.
And you may have wondered if it’s time to bail.
When everything’s tanking, it’s hard not to panic.
Look, you’re not alone. Everyone is going to think that way after a week like the one we just had.
But here’s the thing—if you haven’t acted already, what you do tomorrow matters more than what the market did yesterday.
There are a few smart moves that can keep you on track… and a couple big mistakes that could make a bad situation way worse.
Let’s talk about both.
And I’ll give you a couple of stock picks that are starting to look like bargains today.
A Lesson From History
I’m going to steal a bit from a report by our CEO Brian Hunt, called “What to Do When the Stock Market Drops.”
It’s a great essay about how to view the market during tough times like we’re seeing now.
And the story starts with a name familiar to all of you.
Amazon.
From Brian:
If you were asked to name some of the biggest stock market winners of the past century, there’s a good chance Amazon would come to mind.
After all, Amazon has gone from a small online bookseller to one of the world’s largest, most powerful companies. In 2020, the company’s market value reached a massive $1 trillion.
Amazon now sells virtually everything… and its founder, Jeff Bezos, is one of the world’s richest men.
As result, Amazon’s shareholders have enjoyed one heck of a ride…
Amazon’s market value has increased more than 120,000% since its IPO in 1997. That kind of gain turns every $10,000 invested into a stunning $12 million.
You probably also know why Amazon achieved such huge success. Its Prime membership program was a big hit. Its mastery of logistics lowered the price of almost everything. Its cloud computing business generated billions of dollars in annual revenue.
What you probably don’t know is what the Dow Jones Industrial Average did on March 4, 2015… or what the Dow did on October 18, 2013… or what the Dow did on ANY specific day of Amazon’s incredible rise.
You also probably don’t know what mortgage rates were on December 12, 2003… or where the Federal Reserve had short-term interest rates set at on July 27, 2011.
That’s because what the stock market and interest rates were doing on those days didn’t amount to a hill of beans compared to what Amazon’s business was doing.
Recessions, bear markets, and stock market corrections made a lot of headlines but proved to be tiny speedbumps on Amazon’s path to success.
What the market did or what made headline news on any specific day is meaningless compared to the power of Amazon’s business model, the massive online shopping trend it rode to success, and the moves its management made.
What really mattered to Amazon shareholders wasn’t the broad market, interest rates, or presidential elections. What really mattered was that Amazon constantly innovated, delivered value to its customers, and outperformed its competition.
It’s easy to get caught up in big market downturns and lose sight of the big picture.
But when you look at your portfolio, it’s critical to think long term with a focus on progress, transformational industry trends, value creation, and innovation.
That is what has won in the market again and again.
What Louis Navellier Expects Next
No one wants to deny the market conditions.
Everyone has their own financial situation, and their own risk tolerance.
But one of our running themes in the Digest is to not act emotionally.
And that is a running theme in Louis Navellier’s services. Louis is an investing legend with 40 years of experience in the market.
He developed his quantitative stock picking system so that he’d always be investing with the numbers and not based on any “gut feeling” or other emotional responses.
Here is part of what he is sharing with his subscribers.
The stock market is a manic crowd that likes to react rather than think.
As the recent earnings announcement season wound down, tariff mania took hold and the Atlanta Fed’s GDP Now forecast for negative GDP growth rattled investors.
However, none of the economic tea leaves that signal a recession, such as PMIs, retail sales, factory output, existing home sales and unemployment are signaling an economic contraction. Instead, a soaring trade deficit caused by the dumping of goods to beat impending tariffs, merely triggered the Atlanta Fed’s GDP Now model to forecast negative GDP growth.
I was lucky enough to sit down with Louis this week and record a video right after Trump’s tariff announcement.
Hit “play” below to watch now.
A lot of people think of Louis as a long-term growth investor who focuses on a “buy and hold” approach. The New York Times called him “an icon among growth investors.”
But that’s not the entirety of Louis’ market approach…
When Donald Trump returned to office, Louis used his software for something different in his Accelerated Profits service.
He designed a portion of his system specifically for short-term stock trading, targeting fast-moving stocks with strong upward momentum. His intended hold periods are one month, three months or six months, and then he takes profits.
He explains how the system is going to focus on the Trump agenda in a free video.
Enjoy your weekend,
Luis Hernandez
Editor in Chief, InvestorPlace
