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Paul Meeks

Paul Meeks

Are Stocks Starting to Improve? Possible New Leaders in Stock Market

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Another week. The rally continues for U.S. stocks, and I think that it can go further if the S&P 500 breaks through technical resistance at 3,000. (We closed today at 2,930.) The tech-heavy NASDAQ 100 (QQQ) now is +7% for the year. The broader S&P has bounced +31% off its March 23 low, but it’s still -9% in 2020. Of course, the COVID tragedy and the expected euphoria from rebounding from it have whipsawed the market, unlike anything we’ve ever seen. I chose “expected euphoria” carefully. Stocks have priced in a quick and strong V-shaped economic recovery this fall. Our explosive rally in equities has proven it. This consensus view better be right, or there’ll be hell to pay with securities prices.

This week, I started investing for a new client. She’s older, so she’s sensitive to taking too much market risk. However, she’s also cool with owning Amazon (AMZN) and a few other beneficiaries of the transition from the analog to the digital world. Yes, I bought AMZN and a few other tech favorites, but the bulk of what I invested in for her wasn’t tech companies but perhaps steadier firms outside the sector that have been and will be leaders during and after COVID. They included health care titans like Johnson & Johnson (JNJ), Bristol-Myers Squibb (BMY), and Baxter International (BAX). I also added retailers like Costco (COST), Walmart (WMT), and Dollar General (DG). Today’s “haves” in retail seems to be those that cater to the price-sensitive customer, and, better yet, they successfully sell online. The rest of this sector could be gutted.

As you know and by now are bored hearing or reading, I’m all about digitizing portfolios by only owning stakes in companies that won’t just survive COVID but will thrive after it. Even for this tech guy, there are plenty of stocks to consider that make the cut that isn’t headquartered in Silicon Valley. However, I do insist on one thing for these candidates: Each must be the innovator and must leverage technology better than its peers. If you want to see how the tech markets were doing a few weeks ago, check out: A Recent Look At Technology Companies And The Stock Market By Paul Meeks.

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All opinions expressed Paul Meeks are solely Meeks’ opinions and do not reflect the opinions of Independent Solutions Wealth Management, LLC (“ISWM”). You should not treat any opinion expressed by Meeks as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion for educational purposes only and does not constitute investment, legal or tax advice, an offer to buy or sell any security or insurance product; or an endorsement of any third party or such third party’s views. Meeks opinions are based upon information he considers reliable, but neither ISWM nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Meeks, ISWM, its affiliates and/or subsidiaries are not under any obligation to update or correct any information provided on this website. Meeks statements and opinions are subject to change without notice. No part of Meeks compensation from ISWM is related to the specific opinions he expresses. Past performance is not indicative of future results. Neither Meeks nor ISWM guarantees any specific outcome or profit. You should be aware of the real risk of loss in following any strategy or investment discussed. Strategies or investments discussed may fluctuate in price or value. Investors may get back less than invested. Investments or strategies mentioned may not be suitable for you. This material does not take into account your particular investment objectives, financial situation or needs and is not intended as recommendations appropriate for you. Before acting on information, you should consider whether it is suitable for your particular circumstances and strongly consider seeking advice from an investment adviser.

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