Why You Should Get ‘Back to the Basics’ in This Market

Whether it’s in sports or life, I often use the phrase “back to the basics” to help me…

Take golf, for example.

If you play the game, you know what I’m talking about. And even if you don’t, it’s simple…

When things go bad, they go bad fast.

Poor posture, bad balance, opening the club face as you hit the ball, swinging too hard…

I think you get the picture…

Any number of little changes can throw your golf swing out of whack. Heck, everyone who plays the game has likely dealt with problems like “slicing” from time to time.

On the golf course, I see folks mentally break down all the time. But getting mad or frustrated weakens your technique. You need a simple plan to save your game.

If a golfer takes all the nuances out of his swing, it’s often easy to turn things around.

When I run into trouble, for example, I just try to hit the ball straight and on target. I don’t think about any of the other things that could be going wrong.

In other words… getting back to the basics is the recipe for success.

In golf, it’s all about the fundamentals and making sure your technique is on point.

It’s a lot like our way of looking for opportunities at Chaikin Analytics. We want to find the best combination of fundamental and technical indicators to pick the right stocks.

No matter whether we’re talking about sports or life, things don’t always go as planned.

How you react to the problem is what matters most. And it all relates to the current market environment…

A lot of investors worry that the bull market has gone on too long. Or they fear that it’s running too high, too fast.

After all, just look at this chart of the S&P 500 Index since the October 2022 bottom…

We’re in uncharted territory. Stocks have just kept running higher and higher.

And market cynics have plenty of reasons to feel the way they do…

Higher interest rates have lingered for longer than expected. That might hurt corporate profits.

Donald Trump could beat President Joe Biden in November. If that happens, Trump might make a lot of policy changes. And the markets could react violently one way or another.

Meanwhile, the U.S. government is more than $34 trillion in debt. It feels like our politicians are printing money every minute.

None of these worries are off base. But in the end, I want you to understand one thing…

Don’t overanalyze what’s going on. Doing that will give you analysis paralysis.”

Take it from someone who has been down a lot of rabbit holes. It’s a waste of energy.

The bull market is still a bull market until it isn’t.

You don’t want to miss out on the upside of stocks because you’re scared of something that might happen. Instead, consider cutting underperformers to free up cash for stronger ideas.

The prudent thing to do is to get back to the basics…

In a bull market run like this, you want to let your winners run. And cut away the losers.

Don’t get bogged down in the details.

Good investing,

Pete Carmasino

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