The most significant presidential election of our lifetimes is simply around the corner. And if you enjoy cable television news, you might seem like the fate of everything hangs in the balance, from our environment to our economy to our health.
However as I’ll show you today, the election has almost absolutely no effect on my stock selecting process. That might shock you. You might even believe I’m absurd for disregarding the election. But here’s the thing: politics and investing don’t blend
If you resemble the majority of people, you have a political predisposition. And when you have a “horse in the race,” you’re more mentally bought the outcome. When feelings permeate into your decision-making procedure, you have got an issue. Emotions blur the line between what you wish to happen vs. what’s more than likely to happen, which can cost you a great deal of cash.
Even if you can control your emotions, politics can still wind up costing you thousands of dollars. This is because, while many political stories “feel” crucial, they’re generally simply “noise” that’s all but impossible to successfully act on. So, when making investment choices, I recommend you ignore politics completely.
In this article, I’ll reveal to you how I let cost action guide my decisions, and I’ll provide you one of my preferred megatrends that makes certain to keep producing earnings no matter who wins next Tuesday.
Successful Traders Take Their Hints From the Market
They examine numerous charts every day. And examine the price action of stocks, bonds, commodities, rate of interest, and the VIX, aka the “worry index.”
That’s due to the fact that the price is unbiased. It doesn’t care who you believe the next president of the United States will be. Rather, it informs you what millions of market participants are doing with their own money.
This is MUCH MORE important than what I or anyone else thinks will happen. So, none of my current trades or suggestions are “bets” on the presidential election. Rather, I have been doing what I’ve done all year.
I’m Betting on Megatrends
Megatrends improve society. They impact people around the globe. They play out over many years. And they’re so huge therefore important that nothing– not even a governmental election– can substantially alter their course.
The internet, the “digitization” of money, and the hypergrowth of social networks are some of the greatest megatrends of the last 3 decades. Stocks leading these megatrends have created amazing wealth. They’ve been some of the most profitable investments of the past years.
Amazon (AMZN) has skyrocketed 2,273% because 2010, digital currency Bitcoin has soared 1,324% over the previous 4 years, Facebook (FB)’s up 816% considering that it IPO’d in 2012.
Politics didn’t stand a possibility versus these megatrends! This idea is also how we determined the massive opportunity in Snap (BREEZE) back in January.
At the time, Snap was a hated stock. It was the black sheep of social media stocks. But we understood that Snap had quietly become an augmented truth (AR), pioneer. Last Wednesday, Snap soared 30% after crushing its profits. It’s now up 100% because of January.
However, focusing on megatrends isn’t simply extremely lucrative. It’s likewise much more secure than you might think. Remember, megatrends have huge tailwinds operating in their favor. They’re going to unfold no matter if there’s a Democrat or Republican in the White House.
Solar Stocks Are a Perfect Example
The chart below says it all. You’re looking at the performance of the Invesco Solar ETF (TAN)– a fund that invests in a basket of solar stocks– because of the start of 2019. It’s escalated by nearly 800% in just under two years. That’s an unbelievable relocation. After all, we’re not discussing a small-cap stock or even a large stock. We’re discussing an entire industry!
Solar stocks shot to the moon despite the fact that President Trump has done a bit for green energy. In truth, Trump pulled out of the Paris Climate Contract in 2017 and stated he wished to revive coal tasks.
Mentioning coal, the death of filthy coal in the US is an unstoppable megatrend going in the other direction. Listed below you’ll see the efficiency of the VanEck Vectors Coal ETF (KOL). It’s plunged 57% given that the start of 2018. Trump was never ever going to conserve coal. You would have lost big time if you purchased coal stocks for political factors.
This Is Why It Pays to Keep Politics and Investing Different
You’d be better off concentrating on unstoppable megatrends like solar energy, genomics, and edge computing.
In reality, I’m incredibly bullish on the long-lasting future of all these trends. Stocks riding these patterns have been standout entertainers recently. Numerous have rallied 300%, 400%, and even 400%+ since March.
So, wait on them to pull back into support prior to taking positions.
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