Stock Moe Review Of The Markets Getting Crushed - Time To Panic Sell?

TL;DR

Stock Moe argues against panic selling and views sharp market declines as opportunities to dollar-cost average into long-term positions. On February 11, the Nasdaq was down 2.82%, while the VIX rose above 30 and reached 31.96; he responded by buying TQQQ. His dollar-cost-averaged portfolio was down 2.6% versus a 7.35% market decline since it began, so read on for his signals, purchases, and portfolio comparisons.

Transcript

hi everyone welcome back to the stock mo show here we got some big things going on i got to tell you that was about a half a mess i was in the middle of drinking some pepsi there but it is my birthday i'm in a good mood even though the market is not being conducive to a celebration which we're going to get into some of the signs i'm seeing are very... Read More

Key Insights

• 😘 Market volatility provides opportunities for investors to add to their positions and take advantage of lower prices.
• 🤨 The flattening yield curve between the 10-year and 2-year bonds raises concerns about a possible recession.
• 🥺 The fear of a Russian invasion in Ukraine could lead to a drop in the market but provide buying opportunities for certain sectors.
• 🍉 Cryptocurrencies like Ethereum and Bitcoin are expected to have significant long-term growth, driven by increased adoption and utility in areas such as gaming and decentralized finance (DeFi).
• ✋ The housing market is projected to see continued price appreciation due to supply chain issues and high demand.
• 🥺 Companies in the EV sector, such as Tesla and Lucid, are anticipated to lead the industry and outperform traditional automakers.
• ❓ The healthcare, energy, and financial sectors are expected to exhibit resilience and potential for growth in the near future.

Questions & Answers

Q: Is it time to panic sell when the markets are getting crushed?

Stock Moe does not advocate panic selling in this downturn. He views red days as times to consider starting or continuing to add to long-term positions, although he notes that the market may not rise immediately after a purchase.

Q: What market signal did Stock Moe use to start buying?

He watched the VIX rise above 30 and reach 31.96. He treats that level as a useful signal for beginning to dollar-cost average into his portfolio.

Q: What did Stock Moe buy during the market decline?

He bought a large leveraged position and specifically added TQQQ. He made the purchase after seeing the VIX spike, describing the move as attractive for the long term.

Q: How far were the major market indexes down on February 11?

Stock Moe reported that the Nasdaq was down 2.82% and the S&P 500 was down 1.89%. He also said the Russell was down 1.3% and described the broader market as looking ugly.

Q: How did dollar-cost averaging affect Stock Moe’s portfolio decline?

His benchmark portfolio, funded every Monday from day one, was down 2.6%. He compared that with a 7.35% market decline since the portfolio started and said dollar-cost averaging had reduced the loss.

Q: How were Stock Moe’s conservative and aggressive portfolios performing?

The conservative portfolio was down less than 1%, while the broader market was down roughly 7% to 7.6% since the beginning of January. The aggressive portfolio was down about 5%, with Tesla described as a major drag.

Q: What did Stock Moe say about cryptocurrency during the sell-off?

He said the crypto portfolio had turned negative again, down 0.70%. He also pointed to a correlation between cryptocurrency and the stock market and still characterized the decline as an opportunity.

Q: What was Stock Moe’s S&P 500 outlook for the end of the year?

He said he believed the S&P 500 could reach 5,000 by year-end. He cautioned that this did not mean the index would begin rising immediately after he bought.

Summary & Key Takeaways

• The market experienced a significant downturn, driven by concerns over inflation and interest rates.

• The VIX (Volatility Index) spiked, indicating increased fear and signaling a potential buying opportunity.

• Dollar-cost averaging is recommended during market downturns to take advantage of lower prices.

• Sectors such as EVs, cryptocurrencies, and the housing market are expected to present profitable investment opportunities.