TradeSmith Presents: The Five Biggest Investing Takeaways of June 2022

By TradeSmith Editorial Staff

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June could be remembered as the month when stocks stopped flirting with a bear market and officially entered one on June 13.

But if that wasn’t enough… The federal funds rate was raised by 75 basis points, we learned inflation is still climbing, and the average 30-year fixed-rate mortgage made more people carefully consider if they should be buying a home right now.

Trouble is brewing, and I recently said that red flags are everywhere.

Of course, you have an edge, because the TradeSmith team is in your corner, helping you navigate through everything that is happening.

Part of that guidance is shared through TradeSmith Daily, and I’d like to remind you of the five biggest takeaways for June.

Takeaway No.1: Tune Out the Noise and Tune into These Key Market Signals to Find the Real Opportunities

Each morning after the alarm clocks go off, investors are awakened by even more noise… and not in a good way.

Between a looming recession, sky-high inflation, and stagflation being everyone’s new favorite buzzword, there is a lot to take in each day.

Some of you might be so confused that you’re freezing up entirely. You’re not sure what to do, so you do nothing at all.

But that doesn’t work.

Senior Analyst Mike Burnick recently shared how to cut through the noise and focus on what’s important.

Here’s everything you need to know.

Takeaway No. 2: Forget High Risk, High Reward: Here’s Proof That Lower-Volatility Stocks Are the Best Way to Maximize Returns

Warren Buffett made his fortune by investing in companies with economic moats, strong fundamentals, and unrealized value. But two years ago, in a world where high-risk investments were front and center, some wondered if the Oracle of Omaha was out of touch.

In 2020, he was sitting on $140 billion in cash, his biggest buy of the year was a buyback of Berkshire Hathaway Inc. (BRK.A) shares, and BRK.A limped along to a 2% gain versus the 18% return of the S&P 500 (with dividends reinvested).

Just Google “Has Warren Buffett Lost His Touch,” and you’ll see plenty of publications with that exact headline in 2020.

Today, the headlines you see are back to revering Buffett as a genius.

While he may have seemed out of touch two years ago, staying true to himself always seems to work out in the long run for the Oracle of Omaha.

Couple that with his propensity for investing in stocks with low volatility, and you’ll have discovered Buffett’s secret to success.

Takeaway No. 3: Three Valuable Tips for Trading and Investing Around Holidays

The number of stock market holidays now sits at 10.

Some of them, like Christmas, often come with seasonal trends like the “Santa Claus Rally.” While I’ll leave the analysis behind seasonal trends up to the data crunchers, markets do change the way they operate around holidays.

You may not need to make any major adjustments to how you normally trade and invest with holiday schedules, but being aware of the differences can help you avoid making simple errors that can cost you money.

With July 4 around the corner, I want to make sure that you have this guide about trading and investing during a holiday to easily reference.

Takeaway No. 4: Are High-Yield Bonds a Wealth Equalizer or Investment Trap?

In November 2013, when I had to pull money from my little girl’s college fund to pay my mortgage, I hit a mental low point and realized I was in financial trouble.

I was a hard worker and had climbed every corporate ladder possible, but I was stuck living the Standard American Dream (SAD): I was saddled with debt and never felt like I could get ahead.

Eventually, I started consuming everything I could about the world of personal finance, and a light bulb went off that made the vague concept of “debt” crystal clear. Debt is really just other people investing off of you. In exchange for receiving money, you pay the lender outrageous interest over time.

The person lending the money doesn’t care if you have to work overtime, get a second job, or drain your savings account to pay off the loan; they just want to sit back and collect checks.

Now, one way to turn the tables is through bonds, and there’s sentiment out there that junk bonds (riskier investments that offer higher returns) are historically cheap and offer incredible opportunity.

But here’s what you really need to know.

Takeaway No. 5: Netflix Shareholders Are Stuck in the ‘Upside Down’ — But Another Reality Reveals the Buy of a Lifetime

Senior Analyst Mike Burnick knows that I’m a huge fan of “Stranger Things,” the wildly popular Netflix Inc. (NFLX) series about a group of kids who discover a supernatural secret hidden in their small town of Hawkins, Indiana. It’s called the “Upside Down” world, and ever since Mike has learned about it, he’s been captivated.

The “Upside Down” is an alternate dimension that exists alongside the characters’ “real world.” Devoid of human life and positive emotions with monsters lurking around every corner, it’s somewhere you want to leave as quickly as possible.

But even though you want to leave and didn’t ask to be there, you can get stuck.

A mental lightbulb started to spark… and Mike realized that this is the perfect analogy for Netflix.

If you can look past the “Upside Down” world, you’ll see that another reality exists at the same time — and it’s that Netflix is the buy of a lifetime.

Of course, our tools aren’t saying to make a move yet, but this is a company you want on your watchlist to strike when the moment is right.

Keep reading to find out why.

As we close the books on June 2022, what was your most important takeaway?

Let me know right here.

We’ll be back tomorrow with new ways you can make more money in the stock market to help secure your family’s future and design the retirement of your dreams.