When Buy and Hold Leads To This

March 11, 2020

Mish's Daily

By Mish Schneider

blankThe most disturbing part of this whole market debacle is that I am getting calls from friends who have lost well more than 6 figures from their retirement accounts.

Page 61 from my book Plant Your Money Tree-A Guide to Growing Your Wealth, “According to Suze Orman, ‘Buy and hold (stocks) is the way to go.”

Page 71- “An old buy-and-hold mindset is no longer necessary when you can track the phase of what you bought.”

And herein lies the problem. Suze Orman came out last week to tell folks it’s time to buy more stocks.

Meanwhile, the media touts the end of the world as we know it.

Hope, fear and greed are not investment strategies.

Between the irresponsible and the irredeemable, there’s a happy medium.

I read this today:

“The expectation: inflation will vanish. That’s what bond yields & inflation expectations are saying loud and clear. The risk is that we will see inflation as certain goods become in short supply. COVID is both a demand AND a supply shock.” Danielle DiMartino Booth.

Her comments come on the heels of what I wrote last night-

“But what has held and could complete the “flation” part of the stagflation scenario?...It also could be the start of what we are already seeing from the human “psyche,” like the hoarding of toilet paper: The rising awareness that if food production and distribution begin to seriously falter, raw materials (food) prices will skyrocket.”

At the risk of sounding like your mom when she says, “I told you so,” phases are key. The Modern Family flashed caution phases 3 weeks ago. I wrote, interviewed and tweeted about it.

Caution phases, historically, are the time to start managing your portfolios and retirement accounts by selling not only the weakest holdings, but also seriously paring off your stronger ones too.

The public sells the lows and buys the highs. You do not have to.

Should Danielle and I turn out correct concerning diminishing supply chain, most conservative move is to wait for recuperation phases in some beat up commodities, especially the softs and the agriculturals.

I would also watch TAN ARCX Invesco Solar Energy-the Solar ETF and Biotechnology IBB iShares NASDAQ Biotech ETF.

Both landed right on great support.

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S&P 500 (SPY) 273 pivotal support. Through 290 would be the start of a rally to test 304

Russell 2000 (IWM) Held the 2018 low. Double bottom? I would only consider that possibility if closes the week out over 140

Dow (DIA) 236.13 the 200-WMA-keep that in mind

Nasdaq (QQQ) 197.50 is one area to clear-another is 200.00. And 192.11 is Monday’s low

KRE (Regional Banks) Regional Banks aint feelin it. 40.00 huge to clear

SMH (Semiconductors) 125.46 pivotal resistance. 120.50 support

IYT (Transportation) 144.52 support with 161 resistance

IBB (Biotechnology) I was hoping to see 105-got close-now, a move back over 110 helps alot

XRT (Retail) Granny puke

Volatility Index (VXX) Does not look bearish

Junk Bonds (JNK) Still holding 98.76 the 2018 low

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