Do more of what’s working…and less of what’s not.
If you want to make a lot of money in the markets, follow that simple rule.
Today, we want to follow this mantra. And we have a simple way to do it, as I’ll share below.
One chunk of the U.S. market is “working” better than anything else right now. And I urge you to own it today.
Let me explain…
It’s tough to follow the rules of smart investing.
It’s no fun to admit you got it wrong when a trade goes against you. The sting is worse when you finally sell and lock in your loss.
So instead of selling, you tell yourself you weren’t wrong – you just got in too early. You hold and hope… only to see prices fall lower and lower. It’s a vicious and painful cycle.
The opposite problem can happen when an investment works out.
Say you’re up 10%, or 20%, in a short amount of time… Your instinct says to sell and lock in the gain. You don’t want those profits to disappear. So you jump out fast, only to see prices continue to move higher.
In short, your gut tells you the exact opposite of what you should be doing. You need to ignore your gut and focus on doing more of what’s working, and less of what’s not.
You can never have a 100% winner if you sell when you’re up 20%. You’ve got to stick with what’s working and prevent yourself from getting out at the first sign of success.
Similarly, you can never have a 50% loser if you sell when you’re down 25%. You’ve got to do less of what’s not working… and cut your losses.
If you want outsized profits, you have to follow this rule. And we see a simple way to do more of what’s working in the markets right now.
It’s easy… It’s the “Melt Up.”
Specifically, the tech-heavy Nasdaq Composite Index has been “working best” in the market in recent months. You can see it in the chart below…
The Nasdaq Composite and the Dow Jones Industrial Average were tracking each other closely. But that ended, starting in April.
Since then, the Nasdaq has taken a decidedly different turn. It is now outperforming the Dow.
Said another way, the tech-heavy Nasdaq is what’s working right now.
If you want to do more of what’s working, then you need to own tech stocks. You need to own the Nasdaq.
One way to do it is with the Invesco QQQ Trust (QQQ). The fund tracks the Nasdaq 100 Index, which holds 100 of the largest companies on the Nasdaq Composite (and moves almost identically to the Nasdaq Composite).
QQQ is a simple way to get into this opportunity. And it’s a smart bet, now that the Melt Up is fully in place.
The biggest gains of a bull market tend to happen in the Melt Up phase. You want to stay invested now. We still have plenty of upside ahead.
So make sure you’re doing more of what’s working, and less of what’s not. Own U.S. tech stocks today… It’s exactly what you should do right now to earn outsized gains.
Source: Daily Wealth