Ugh…
Like it does every so often, volatility has raised its ugly head on Wall Street.
These things happen…
However, the reaction that you may have to said volatility may mean the difference between prospering and full out panic.
Which would you choose?
Why are the markets entering a season of volatility?
Fear…
Fear is one of the biggest driving forces behind the volatility that the markets recently endured – as it often is in these cases.
That deep, guttural fear that we all have buried deep inside has suddenly popped back up in the US markets…
But what most people don’t realize – is the kind of opportunity that this recent bout may offer the astute investor.
What’s driving the fear? Well, that’s easy, recent news of the American airstrikes in Iraq that killed a known terrorist and Iranian military general sent all three major indexes swirling after the opening bell.
The Dow dropped 235 points, or 0.8% while the S&P 500 fell off by 22 points or 0.7% and the Nasdaq was down 0.7% in early morning trading.
The threat of war is a VERY healthy fear…
But what got a lot of people shaking in their boots was the fact that the The CBOE VIX Index – the index that measures market volatility – reached as high as $16.02, but pulled back to around $13.38, which was still above its previous close of $12.47…
And it all came as the market continued to strengthen after a solid 2019.
Think about this, the S&P 500 just had its best year since 2013 and set another record Thursday to start 2020.
One investment strategist said, “Within the space of 24 hours, sentiment took a 180-degree turn. This very much characterizes the sort of year we expect 2020 to be: On the one hand, fundamentals are getting a bit better, trade headlines are getting a bit better; but on the other hand, bouts of volatility will be frequent.”
That said, what’re investors like us supposed to do?
Can we continue to make money like we have over the past few years?
Or should we circle the wagons and pull up stakes for greener, and more secure, pastures.
Well, the short answer?
Yes, we can CONTINUE to make money – even when there is no market certainty.
While many sectors will be sucking eggs as long as tension between the US. and Iran continue to grow and form…
There really is no hard timeline as to when they might ease after Iranian leadership talked of retaliation early Friday – so people are going to have go outside the box to look for something to sink their teeth into.
For example, we saw some BIG movement the day Trump ordered the retaliatory attack on the Iranian terrorists…
And they were things we may not have seen coming…
And some that we definitely DID.
Some of the big gainers on that Friday included defense stocks like Northrop Grumman Corp. (NOC) – which was up more than 4% in morning trading – and Lockheed Martin Corp. (LMT) which was up 4.1% that same day.
Another big mover was Brent crude oil jumped as much as 4.2% – which saw it topping an eight-month high of $69.01 – while US crude rose 3.7% to $63.44 that same morning.
Another avenue for profits during this temporary market volatility is precious metals.
On that same day, gold jumped $23.30 to $1,551.40 and silver was up 0.6% to $18.16 an ounce…
Platinum rose 0.5% to $990.10 and palladium inched closer to the $2,000-an-ounce mark – jumping 1.2% to $1,952.40.
So…
There are ways to make money – even if they aren’t the kind of places we like to invest in.
The big question everybody is asking is…
How long will this volatility last?
Well, some believe that there will be a few more pullbacks on the horizon – especially if the situation between the US and Iran can’t get ironed out sooner rather than later.
One investment officer told the Wall Street Journal, “If tensions were to increase and go to their worst possible outcome … this would be just the beginning of the pullback.”
So take that with a grain of salt…
That said, subscribers of GorillaTrades aren’t worried about the volatility as the truth is – volatility doesn’t effect our recommendations as much as the rest of the Wall Street.
Why?
Because our picks are made on HARD numbers and REAL data…
So, we don’t really worry about too much.
If you don’t want to worry, you should consider becoming a subscriber too.
Though, we understand if joining isn’t your thing…
Regardless, you may want look at some of the areas I mentioned – you could be setting yourself up for some profits while the rest of the world runs around like a chicken with its head cut off.
“I wouldn’t say I have a lack of fear. In fact, I’d like my fear emotion to be less because it’s very distracting and fries my nervous system.” – Elon Musk