Here we are again with the stock market hitting new all time highs again. Isn’t this great? All the stock market does is go up. 401Ks and retirement accounts look absolutely fantastic right now.
It feels that regardless what the news is, the market just shrugs it off and continues to climb higher.
This rings true for the broad indices such as the S&P 500 and Nasdaq. But what many are missing is that a majority of stocks within these indices have already gone through a correction period.
Sam Ro who just started a Substack called TKer wrote this about the S&P 500 in his Tuesday post.
J.C. Parets at All Star Charts had this tweet illustrating what has happened under the surface in the Nasdaq.
If you own individual stocks you’re more aware of this and likely experienced some of these pullbacks. If you’re just invested in index funds you probably were not even aware this many stocks had undergone such a pullback.
It’s a reason index investing is so popular. You get diversification and broad exposure to stocks with less volatility than individual stocks. Plus you aren’t having to try and pick the individual stock winners. It’s the simplest way to invest but also the smartest. Always be sure you start with the broad exposure of an S&P 500 index fund. It’s where the majority of my money is invested.
Some readers have asked my opinion on I-Bonds. These are very popular right now for people looking for a more conservative investment. It’s not something that I would invest in as I don’t own any bonds.
Since this question has come up, I wanted to share links to some recent articles on the subject. Obviously do your own research and talk to your financial advisor. But if you’re looking for a conservative and stable return on your investment, these are a good place to park some money. The interest rate with I-Bonds is currently at a 7.1% annualized return.
Treasurydirect.gov: Individual - I Savings Bonds
Moves I’ve Made
A fews days after I wrote my last investing update the market saw a rather steep selloff. Many names were sold off rather hard and many thought we were facing a larger pullback. It clearly didn’t last long. I was able to add to some positions on what I thought was an oversold few days.
I added more shares of Peloton (PTON). This stock has been punished of late. I’ve owned it since the low $30s and sold some near the top in the $160s. The rest I have let ride, but anytime this stocks falls back into the low $80s, I have to add more. I added more at $81 and it’s already back up to $93, way below where this stock will eventually be
You already know I’m a huge fan of Peloton. This company is disrupting the fitness world. Think the early days of Netflix’s disruption period.
This past week two of the 5am live rides I was in had more people than I’ve ever seen before. They’ve been introducing the addition of new instructors which it seems like every other week. This does not sound like a company that has slowing growth which the stock price currently reflects.
A few other recent points that stick out to me.
Introduction of the new tread. There has been a push in advertising it and the past two instructors they’ve added are tread instructors. Clearly there are tread sales being made if you need to add more tread instructors.
There have been reports of a rower coming. This would be a welcomed addition that a lot of people have been asking for. Rowing is very popular.
The partnerships with health insurance companies for corporate wellness and hotel chains are just beginning to kick off. How many times have you been to a hotel gym where the cardio equipment is broken or it’s so old and outdated you just don’t use it? Peloton is going to change that.
A segment I’ve said that hasn’t been discussed enough is the possible pivot into the gaming side. There have been reports of a video game being developed called Lanebreak. Imagine what could be done if you can blend fitness into video game experiences?
I also added to my positions in Square (SQ) and DraftKings (DKNG). Both are positions like Peloton that I’m in for the long term and will add to on any deep selloffs like these just had.
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Disclaimer: This is not investment advice. You should not treat any opinion expressed as a specific inducement to make a particular purchase, investment or follow a particular strategy, but only as an expression of an opinion.