This past week has been one for the ages for both presidential politics in the United States, and on Wall Street, and there are a few postelection rally stocks you should consider. Rarely do we see that kind of continuous straight up sort of rally every day, with the three major U.S. stock market indexes racking up significant gains.
In today’s video, I’m going to discuss two things.
The first is how to deal with the psychology of what happened because I think I know how some of you are feeling right now. When the market explodes upward like this — relentlessly higher for several days in a row — it can catch you by surprise.
The second thing I’ll show you is a couple of stocks that are destined to continue higher…
But first things first.
Things were relatively flat Friday. But Monday through Thursday, postelection rally stocks soared. We saw gains of 7.5% in the S&P 500, 6% in the Dow, and 9% gains in both the Nasdaq and Russell 2000.
And a lot of what happened this week was to be expected. I posted a video last week noting the put-call ratio showed people quickly switched from bullish to bearish. And whenever people change their opinions that sharply, it’s almost a certainty that the market will move in the opposite direction…
And boy did it.
At this point, you should keep your eye on the Russell 2000. It has been the weakest of these four indexes over the past few years.
BUT, it just hit its highest point since before the pandemic. IF it can keep working its way higher in this postelection rally, it will be on track to challenge its all-time highs, set almost 2 ½ years ago.
These sharp moves up bring us back to the psychology of investing and what we call FOMO — fear of missing out. It can be depressing if by chance you weren’t fully invested, or if you owned stocks that didn’t ride the wave up.
So you might be thinking, “I just missed a rally for the ages. Now what do I do?”
The first step is to readjust your attitude. Take a deep breath, and take a step back. Do NOT go in guns blazing on Monday and buying with both fists to play “catch up.”
I know that feeling myself, and my advice is to fight that urge. Whether you’re a trader buying options or a buy-and-hold investor, you have to play the long game to survive on Wall Street. That means picking your battles and being strategic — not reckless.
Check out my short video and I’ll discuss the psychology a bit further, and tell you my three postelection rally stocks. Do you have any stocks you’ve had your eye on in the election aftermath? Share your thoughts and trade ideas in the comments below!
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