What Should I Be Investing in Right Now?

With markets down so far off their peaks and volatility reigning supreme, investors are right to be sorting through the destruction, looking for opportunities. But if you’re on the Google searching something like “What should I be investing in right now?” you’re going to get really bad advice…

I know this because I gave it a shot myself. And I got pages upon pages of results with lists of the top however many stocks to buy right now. But the thing is, every single one of those articles misses the mark when it comes to giving you a good answer to the question, “What should I be investing in right now?”

Because every single one of those articles just lists a bunch of companies with solid track records whose stocks are down from their peaks. Well, there are hundreds of those. Everyone is down from their peak. And most American companies have solid track records.

It’s like trying to pick the fastest race car out of a blurred picture. You might get it right. But that driver might swerve going into the next turn, too.

If you really want a useful answer to the question “What should I be investing in right now?” then keep reading, because I’m going to show you how to avoid the losers and pick the winners when you start buying what you should be investing in right now…

What Should I Be Investing in Right Now? Invest in Ideas, Not Individuals

The biggest quarrel I have with the standard responses to the question “What should I be investing in right now?” is that every single one of them rattles off a bunch of individual stocks.

And while picking the right company out of a field of thousands is one way to make market-beating returns (just look at Nvidia’s investors)…

It’s often a losing bet. It’s just far too difficult to predict which company will be the next Apple or Amazon or Tesla or Nvidia. And for every one of those massive winners driving the market higher, there are hundreds of stocks that underperform the broader market.

Google is a great example of one of these companies. Sure, it’s been a great investment, returning over 6,000% since the fallout of the dot-com crash.

But it wasn’t as good as Apple or Amazon or Nvidia…

So the internet was a good investment. Connectivity was a good investment. Heck, even Google was technically a good investment…

But the best investments were in other companies. So if you’d decided Google would be the biggest winner, you’d have missed out on the biggest gains.

But if you bought the idea and not the individual, you’d have participated in Apple's, Amazon's, and Nvidia’s gains while Google’s middle management got rich off investor cash.

But don’t take my word for it. There’s actual research that shows I’m right: The majority of the movement of the stock market is driven by a handful of stocks…

For the period 1983–2008, the Russell 3000 (which represents about 98% of the investable market) returned almost 10% a year, producing a total return of 1,074%!

However, during this period, about 40% of stocks had a negative return and about 20% lost nearly all of their value.

And a whopping 64% of all the stocks in the Russell 3000 underperformed the Russell 3000.

Over that period, only 10% of the stocks recorded major wins. And those were the ones that drove the entire index up 10% a year.

So if you think those articles you’re finding when you Google “What should I be investing in right now?” have crystal balls and know which stocks are going to rip like Nvidia and which are going to stagnate like Google, by all means follow their advice.

But if you understand that most of a stock’s movement is dictated by the movement of its sector, then keep reading…

What Should I Be Investing in Right Now? Sectors Over Stocks

You know the adage, “A rising tide lifts all vessels”? There’s a reason they say that: It’s true…

In fact, studies have shown that as much as 80% of a stock’s movement is dictated by the movement of its sector.

And other studies have shown that over 90% of the performance of your portfolio comes from asset allocation, while stock selection and market timing only account for 7%.

So if the movement of the sector influences the movement of the stocks in it more than anything else…

And if the asset mix in your portfolio makes a bigger difference in your gains than the individual stocks or when you bought them…

Wouldn’t you want to pay more attention to the overall sectors you’re investing in?

And wouldn’t you be more concerned about the right overall asset mix instead of the right stock picks?

Most investors would say yes. Unfortunately, most investors wouldn’t act on that declaration.

But acting on that declaration is exactly how you can set yourself up for market-beating gains as the trends shaping the sectors where those stocks trade play out.

What Sectors Should I Be Investing in Right Now?

Now, if you’ve stopped asking “What should I be investing in right now?” and started asking “What sectors should I be investing in right now?” then I’m a happy camper…

Because I’ve accomplished my goal of helping you look past the individual trees to see the beauty of the forest. And now you’re ready to get set up in the sectors poised for massive moves over the coming years…

I’m talking about sectors like energy, where investment in reliability has languished for over a decade while investment in folly has flourished…

Trillions of dollars and over two decades of investment in alternative energy have yielded nothing but growth for fossil fuel consumption:

Oil, coal, and natural gas respectively hold the top three spots for energy generation globally…

The writing is on the wall and the words are very clear. Hydrocarbons like oil, gas, and coal keep the world turning and will continue to do so for some time, likely long after everyone reading this is turning into fossil fuels themselves.

What Should I Be Investing in Right Now? Your Future

Right now, the market is pricing in a world of endless green energy and endless technological advances. But reality always returns to assert itself in the markets…

And when it does, sectors like traditional energy that have been left for dead, but are literally essential to our survival as a species are going to explode with profits.

You can try to pick the individual winners in those sectors. Or you can bet on the trend that will drive the sectors that will power 80% of those stocks’ profits.

I know what I think, but I want to know what you think…

Are you better off betting on the sector and forgetting the individual stocks? Or have I lost my marbles?

Just reply to this email to let me know (or if you're reading online, click here to shoot me a note).

Whatever your decision, my colleagues, the Wealth Daily community, and I will all be here along the way to help you make the most of it.