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How to Make Money in the Stock Market in Late 2020 and Forward

S&P 500 at a New All Time High


The S&P 500 has rallied 59% from the bottom reached in march. My last post explained my strategy on taking advantage of the 2020 stock market crash. I was able to double my portfolio since March by primarily investing in SPXL. SPXL is a 3X weighted ETF tracking the S&P 500. Meaning, a 1% move in the S&P 500 yields a 3% move in the price of this ETF. I have locked in some profits, and now, I’m looking to redeploy some my gains into some new opportunities to make some massive profits.

Many experts are now saying the stock market is too expensive to be deploying money into right now. The average P/E ratio of the S&P 500 is now sitting at 36.4 when the average normally sit at about 21.12. While many companies like Apple, Amazon, Google, Microsoft, and other companies with huge market caps have made significant gains. Most of the other companies in the S&P 500 have not yet recovered from the crash. The chart bellow shows the performance of S&P 500 companies year to date as of 08/28/2020.

S&P 500 Companies Year To Date as of 08/28/202

What to do now?

As you see in the chart above, many companies in the financial, energy, energy, utilities, industrial, and consumer cyclical sectors are still negative year to date. Companies like JP Morgan Chase and Bank of America, and Boeing are still down over 20% year to date. The consumer cyclical section, for example, is highly highly cyclical obviously, and these companies only do well when the economy is doing well and when people are out buying goods and services. There is a tremendous opportunity to start purchasing some of these stocks while they are beaten down. While I will not be investing in the indexes tracking the S&P 500 until there is a market correction, I will be looking at some of the companies that have yet to recover. My favorites right now are in the banking and aerospace sectors. I will also be looking into the travel sector and retail stores. The economy is suffering right now with so many people not working. While the economy inches towards making a recovery, I will be purchasing some of these undervalued companies with the fundamentals to make it through to the other side without going bankrupt.

If you’ve been thinking about investing but have not taken any action towards it yet, remember, NOW is always the best time to start. Open a brokerage account and fund it. You do not have to throw $10,000 in right away; you can always set aside a bit of money every week and transfer it to your account while you do your research. That way, when you find those great opportunities. The money is available to start buying those assets. 

Both of these companies allow you to trade commission free, and will provide you with some free stocks for joining if you using my links: (Join Webull or Join Robinhood). I personally use both. I use webull for day trading and buy/selling options because it is more reliable, and I use Robinhood to buy and hold stocks long term because they support fractional shares, allowing you to invest with as little as $1, and they support dividend reinvesting.

Disclaimer: I am not a/your financial advisor. There is risk in investing, and I will not be responsible for any loses incurred due to your investing strategies. I’m just sharing my opinions and the stocks I’m personally heavily adding to my portfolio during this economic downturn.
     
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Comments

  1. 3pakx7Sunday, August 30, 2020 5:09:00 PM

    Thank you. Sensible.

    ReplyDelete
  2. FinleyWednesday, September 02, 2020 4:58:00 PM

    You’re welcome. I’m glad you found it of value. Please share with others.

    ReplyDelete
  3. seostar2Monday, September 14, 2020 1:45:00 AM

    Why are you investing? Ask yourself your reason for stock investment - is it to get a fixed income every few months? Is it to save up for your retirement? Is it to generate profit over the long term? Is it part of your get rich quick scheme? The latter is called speculating and investors usually do this on a short-term basis; money gain plan website

    ReplyDelete
  4. Marie BowmanWednesday, October 21, 2020 6:16:00 AM

    A good blog always comes-up with new and exciting information and while reading I have feel that this blog is really have all those quality that qualify a blog to be a one. Trust for a better future

    ReplyDelete
  5. pssinvestThursday, March 25, 2021 7:18:00 PM

    It is what I was searching for is really informative.stock market basics It is a significant and useful article for us. Thankful to you for sharing an article like this.

    ReplyDelete

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