Ditch Politics, Win with Stocks

Election results are in!

This time around, the polls were essentially on target. The Democrats took the House, while the Republicans maintained control of the Senate. We won’t have to deal with any hanging chads, recounts, or any other uncertainties that could cast a pall over the markets.

With no surprises to digest, futures are rising this morning. The Dow could open 200 points higher as the election season hype fades away.

While the stock market doesn’t necessarily care about who won these races, your average investor is a completely different beast. In our hyper-politicized world, taking sides is all that matters.

Unless you want to make money.

If you let your political beliefs sway your investing decisions, the market’s going to run you over. Unfortunately, the internet has made it all too easy to bury your head in the partisan sand. With the click of a mouse, you can limit your information intake to only the websites and commentary that confirm to your viewpoints.

Think of it this way: The wealthiest investors in the world are always extremely critical of their best ideas. They actively seek out sources that disprove their investing thesis. If their arguments can’t stand up to scrutiny, they’ll change their minds.

If you believe the market cares about the political affiliation of your congressman, you’re fighting the tape to your portfolio’s detriment.

Ultimately, your success in the markets hinges on your ability to shut out the political noise and allowing price to lead you to winning trades.

That’s enough political talk for today. Let’s turn back to the market as the averages attempt to extend last week’s rally…

With the election out of the way, investors can focus on what really matters: Christmas shopping.

Like it or not, the holidays are upon us.

I was greeted by pre-lit Christmas trees and giant inflatable snowmen last week on my trip to my neighborhood big-box home improvement store (the staff had already unceremoniously stuffed the leftover Halloween decorations in the clearance corner).


Since Cyber Monday has officially replaced Black Friday as the most important shopping day of the year, our nation’s retail operations are skipping Thanksgiving altogether to rake in as much of that sweet Christmas cash as possible.

Don’t get me wrong — the Great American Shopper is still alive and spending fistfuls of dough. But the early-morning mall riots of Black Friday are becoming a relic of the past. Gone are the days when long lines of shoppers snaking into dimly lit parking lots could score some coverage on the local news. The retail narrative has now officially shifted to the online consumer.

Black Friday might be on its last legs. But old-school retail gimmicks are alive and well in the online shopping era. Amazon.com (NASDAQ:AMZN) just announced it will release a printed holiday toy catalog this month, complete with QR codes to help shoppers buy their favorite items. After killing Sears, it looks like Amazon is digging into the retail dinosaur’s playbook.

Turning to the charts, brick and mortar retail looks ready to roll heading into the holiday shopping season.

With all eyes on Amazon, old-school retail stocks are starting to look like market leaders right now.

The SPDR S&P Retail ETF (NYSE:XRT) is quickly recovering from the October correction. It’s down a little less than 5% since Oct. 1, compared to Amazon’s nasty 18% loss over the same timeframe:

It’s no coincidence that we’ve loaded up on stocks such as Target Corp. (NYSE:TGT), Tractor Supply Co. (NASDAQ:TSCO), and Ulta Beauty (NASDAQ:ULTA) — which just broke out to new highs yesterday.

These are the stocks that are showing relative strength heading into the final weeks of the year.


Greg Guenthner

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Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

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