It’s now been more than a year since the S&P 500 hit its pandemic low on March 23, 2020. As I detailed in March of last year, I was fortunate enough to make some extremely timely investments on the exact day the market bottomed.
I bought seven stocks: Berkshire Hathaway (NYSE: BRK.B), Bank of America (NYSE: BAC), Alphabet (NASDAQ: GOOGL), General Motors (NYSE: GM), United Airlines (NYSE: UAL), Wynn Resorts (NASDAQ: WYNN), and Canopy Growth Corp (NYSE: CGC).
People who subscribe to my 100% free Marketfy trade alerts received instant email notifications when I purchased these seven stocks. Those same subscribers recently received a couple of subsequent notifications.
My hunch that the pandemic sell-off was only temporary proved to be more right than I ever would have anticipated. All seven of my stock buys ended up being home runs. But as I said in my book about my investments during the financial crisis of 2008 and 2009, timing your entry point is much more important than which stocks you choose to buy. It’s been nearly 16 months since I bought those seven stocks, and the S&P 500 has more than doubled off its intraday lows of March 23, 2020.
About one year and one month after I bought those seven stocks last year, five of the seven stocks are up at least 100% (Berkshire is up 67% and Canopy Growth is up 88%). The top performer of the group, GM, is up 222.2%.
When March 23, 2021 rolled around and I could safely sell my 2020 buys at the long-term capital gains tax rate, I sold only one of the seven stocks, Wynn Resorts. I am still bullish on Wynn, but I prefer MGM Resorts (NYSE: MGM) because of its exposure to the U.S. online sports betting market.
As for the other five stocks, I’m still long and strong. There may be some bumps in the road along the way, but the economy appears to be recovering rapidly thanks in large part to about $6 trillion in stimulus spending.
It appears the big topic of conversation on Wall Street in the second half of 2021 will likely be inflation. It’s already here, but the Fed insists it is temporary. If it is, we are good to go. If it is not, there could be trouble down the line. Rising interest rates are very bad news for growth stocks, and the high-growth tech sector has taken over the U.S. stock market.
For now, stocks look expensive, but interest rates remain extremely low and nobody should be trying to fight the trend, which is clearly to the upside. It’s probably not the best time to be buying stocks, but I’m certainly not selling. Things may get bumpy if earnings growth disappoints or if inflation gets out of control. Otherwise, there’s no reason to be cashing out of this post-pandemic bull market and selling stocks just yet.
Oh, actually I would recommend selling GameStop (NYSE: GME), AMC Entertainment (NYSE: AMC) and Dogecoin (CRYPTO: DOGE) because they are all ridiculous garbage investments. But most other stuff is probably fine.
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