Investing in Losing Stocks: A Strategy for Success
As an investor, it’s crucial to stay ahead of the market trends and make informed decisions based on expert insights. According to leading investors, now may be the perfect time to build positions in losing stocks. Jeff Kilburg, founder and CEO of KKM Financial, believes that the upcoming consumer price index (CPI) report in March is unlikely to beat economists’ expectations. In fact, Kilburg predicts that the CPI reading will either meet expectations or come in higher.
With the current strength of the U.S. economy and consumer spending, along with the recent five-month rally in stocks, Kilburg sees little chance of inflation easing anytime soon. This sentiment has led to investor nervousness, as seen in the recent market selloff. Kilburg warns that if the CPI data exceeds expectations, the Federal Reserve may delay its interest rate cutting campaign, causing a potential 5% pullback in the S & P 500.
Mike Bailey, director of research at FBB Capital Partners, shares Kilburg’s assessment and believes that the inflation outlook poses more upside risks than downside risks. With this in mind, Kilburg is focusing on trimming winning positions like Meta, Nvidia, and Amazon, while adding to lagging stocks such as industrial and healthcare companies. He highlights companies like UnitedHealth, Lockheed Martin, and 3M as solid investment opportunities.
Bailey also emphasizes the importance of investing in cyclical names that stand to benefit from economic growth during times of high inflation. He recommends looking into financial, energy, and industrial companies as potential winners. Specifically, Bailey likes insurance stocks like Marsh & McLennan and Progressive, as well as companies like Visa that can capitalize on higher prices.
In conclusion, while investing in losing stocks may seem counterintuitive, it can be a strategic move to capitalize on market trends and position yourself for success. By following expert advice and staying informed on market developments, investors can make smart decisions that lead to profitable outcomes. Stay ahead of the curve with Extreme Investor Network for more unique insights and investment strategies.
