Don't Put All Your Eggs in This Popular Basket

Huckster Jordan Belfort made a fortune selling "pink sheet" penny stocks to unsuspecting investors... You've probably heard of Belfort before. He's the main character of the hit movie The Wolf of Wall Street. In it, he's played by Leonardo DiCaprio. [Chaikin PowerFeed]( Don't Put All Your Eggs in This Popular Basket By Vic Lederman, editorial director, Chaikin Analytics Huckster Jordan Belfort made a fortune selling "pink sheet" penny stocks to unsuspecting investors... You've probably heard of Belfort before. He's the main character of the hit movie The Wolf of Wall Street. In it, he's played by Leonardo DiCaprio. Belfort thought he had the system beat. But he made one fatal mistake... His contingency plan was to store most of his ill-gotten wealth in Switzerland. Belfort put the money in an account named after his wife's aunt. He did it to avoid confiscation by the feds in case he got caught. It was a near-perfect plan... But then his wife's aunt unexpectedly died of a stroke in 1999. That shut him out of his Swiss bank account holding his pile of wealth. Belfort made the big mistake of putting all his eggs in one basket. By that, I meant he deposited all his backup savings into one account under one person's name. And it wasn't even his name. Most Americans don't own a Swiss bank account, let alone one under someone else's name. But a majority (62%) own stocks. Of course, they're always looking for ways to outperform the market. And these days, one particular "basket" of stocks gets most of the attention for folks chasing outperformance... Recommended Links: ['Announcing My Biggest Breakthrough in 50 Years']( On October 29 – three blocks from the New York Stock Exchange – Wall Street legend Marc Chaikin will cut the ribbon on the biggest breakthrough of his career. This is a new way for you to handle your money that could double your portfolio, by allowing you to spot the biggest potential buying sprees on Wall Street, before they occur. [Click here to learn more](. [Is Gold Headed Above $3,000 per Ounce? Here's How to Play It...]( With so many strange events happening across the economy (the longest bear market for bonds since the Civil War... unprecedented bank closures... and soaring prices), it's no wonder the richest investors are loading up on gold. But what you might not realize is there's a much better way to profit from rising gold prices – WITHOUT ever touching an ETF, mining stock, or even bullion. [Get the full details here](. I'm talking about the so-called "Magnificent Seven." Regular readers know all about this group of stocks. They're seven of the world's largest companies listed in the U.S. This list is made up of Apple (AAPL), Amazon (AMZN), Alphabet (GOOGL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA). Combined, they have a colossal market cap of more than $16 trillion. To put that in perspective, that's roughly 30% of the value of the entire U.S. stock market. All seven companies are part of the S&P 500 Index, in which they also have a combined weighting of about 30%. That's an average weighting of more than 4% weighting for each of the Magnificent Seven stocks. The 493 other companies in the S&P 500 carry an average weight of just more than 0.1%. Each Magnificent Seven stock is about 30 times more significant than the 493 other S&P 500 companies. Because of this, the Magnificent Seven became a basket of investments. And as you would expect, there's an exchange-traded fund ("ETF") focusing solely on these seven companies. It's called the Roundhill Magnificent Seven Fund (MAGS). And it has boasted big gains this year... Since the start of 2024, MAGS is up 40%. That's nearly double the 21% return of the S&P 500 over the same time frame Take a look... Folks, a 21% return for the broad market in less than a year is impressive. But making nearly double that from seven stocks picked from the same basket is mind-boggling. Thanks to these big gains and all the media attention on the Magnificent Seven, it's no surprise that ordinary investors are pouring in to the ETF. Back in January, MAGS had $69 million in assets under management ("AUM"). Today, it has almost $775 million in AUM. People investing heavily in MAGS, or assembling their own "Magnificent Seven basket," are clearly hoping to continue the amazing string of market-beating returns. They're putting their eggs in one small basket. However, if three companies in this basket have a bad quarter, the entire group takes a big hit. But if three companies in a basket of 500 companies have a bad quarter, it's more of a hiccup. We're already starting to see that unfold... Over the past three months, the S&P 500 has outperformed MAGS. It's just by a few percentage points. But it should be enough to get your attention. The Power Gauge sees it, too... According to our system, three Magnificent Seven stocks have weak strength and timing indicators. The lesson here is simple... It's easy to get blinded by high returns when it happens in one corner of the market. That creates an urge to jump on the bandwagon – especially when it involves the seven biggest stocks in the market. But with the Power Gauge, we can take a more nuanced view. You don't have to just throw in with the basket and hope for the best. That's not to say the Magnificent Seven stocks are bad investments... But simply riding them for consistent long-term returns is a one-basket approach. And as investors, we don't want to make the mistake of piling everything into a single basket like that. Good investing, Vic Lederman P.S. When it comes to winning strategies, my colleague and Chaikin Analytics founder Marc Chaikin is gearing up for a big reveal... Marc says there's a big disconnect in the market right now. And that's creating what he calls the "greatest rapid-fire moneymaking opportunity" of his 50-year career. To share the full story, Marc is going on camera to share all the details. It's all happening this coming Tuesday, October 29, at 10 a.m. Eastern time. You can register to attend his big reveal and learn more by [clicking here](. Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 -0.98% 11 14 5 S&P 500 -0.92% 140 278 75 Nasdaq -1.53% 18 69 13 Small Caps -0.89% 509 1025 386 Bonds -0.26% — According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Utilities -0.11% Energy -0.42% Information Technology -0.42% Staples -0.7% Communication -0.75% Financial -0.78% Real Estate -0.89% Materials -1.4% Industrials -1.83% Health Care -1.87% Discretionary -2.44% * * * * Industry Focus Semiconductor Services 6 30 3 Over the past 6 months, the Semiconductor subsector (XSD) has outperformed the S&P 500 by +0.51%. Its Power Bar ratio, which measures future potential, is Strong, with more Bullish than Bearish stocks. It is currently ranked #11 of 21 subsectors. Top Stocks [rating] NVDA NVIDIA Corporation [rating] SMTC Semtech Corporation [rating] PI Impinj, Inc. * * * * Top Movers Gainers [rating] NTRS +7.02% [rating] TDY +6.0% [rating] PKG +5.53% [rating] SW +4.74% [rating] T +4.6% Losers [rating] ENPH -14.92% [rating] STX -8.1% [rating] ODFL -5.45% [rating] CSGP -5.27% [rating] MCD -5.12% * * * * Earnings Report Reporting Today Rating Before Open After Close CARR, CBRE, CMCSA, ALLE, DTE, SPGI, NOC, KDP, KKR, NDAQ, MHK CINF, WY, UHS, RMD, PFG, LHX, HIG, COF LKQ, LUV, LH, KMB, ITW, HON, HAS, TSCO, TXT, GOOGL, VLO DOC, EMN, DLR, DECK, MSFT, NUE, PKG, CMS, V, VRSN, AJG WST, UPS, UNP, POOL, GPC, DOW DXCM, EQT, EW, CMG No earnings reporting today. Earnings Surprises [rating] LRCX Lam Research Corporation Q1 $8.60 Beat by $7.79 [rating] NTRS Northern Trust Corporation Q3 $2.22 Beat by $0.47 [rating] RJF Raymond James Financial, Inc. Q4 $2.95 Beat by $0.54 [rating] TSLA Tesla, Inc. Q3 $0.72 Beat by $0.12 [rating] BA The Boeing Company Q3 $-10.44 Missed by $-1.62 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. For questions about your account or to speak with customer service, call [+1 (877) 697-6783 (U.S.)](tel:18776976783), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. Please note: The law prohibits us from giving personalized investment advice. © 2024 Chaikin Analytics, LLC. All rights reserved. Any reproduction, copying, or redistribution, in whole or in part, is prohibited without written permission from Chaikin Analytics, LLC. 201 King Of Prussia Rd., Suite 650, Radnor, PA 19087. [www.chaikinanalytics.com.]( Any brokers mentioned constitute a partial list of available brokers and is for your information only. 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