Investors are happy the election is over. The S&P 500 is up 5% in the last five days. This sets the stage for US stocks to rally further and close the year at an all-time high.
Greetings Friends,
It’s been a wild week.
On the night of November 8 when it became clear Donald Trump would become the next president of the United States, stocks started tanking – and tanking big time.
The S&P 500 went limit down in the overnight session. The Dow Jones was down more than 1,000 points.
However, the bearish tone didn’t last long.
By the time the regular session opened in the morning, the S&P 500 had recovered all losses and went on to have one of its best days in two years.
Since then, the party has continued. The S&P 500 is up more than 5% in the last week – accounting for almost its entire gain on the year – and back within 2% of the all-time high.
Take a look at the big bounce below.
These gains are being driven by an important psychological shift.
Investors are happy the election is over. It was a major source of uncertainty. For months ahead of the election, individual investors and fund managers were hoarding cash. They shifted out of stocks and into cash and bonds.
Now, with a major risk event in the rear view mirror, all that cash is gushing back into the U.S. stock market.
According to Lipper data, in the week ended November 16, investors sent $23.6 billion into US based stock funds. That is the most in close to two years and the third best week ever for the group of funds.
Looking forward, I am expecting investors to continue pouring money into U.S. stocks.
November and December are great months for U.S. stocks. November is tied with April as the second-best month of the year for U.S. stocks.
December is the best month of the year for U.S. stocks, with an average return of 1.7% since 1950.
These are the reasons I expect the S&P 500 to close the year at a new all-time high.
I have been encouraging my clients to send extra cash into the market. This is an optimal time of the year.
While the S&P is on its way to a very good year, marijuana stocks have been burning up the charts.
8 out of 9 States Vote Yes on Marijuana – Cannabis Stocks up Big
November 8 was a great day for legal cannabis industry.
8 out of 9 U.S. states voted ‘yes’ to new medical or recreational programs.
That brings the total number of U.S. states with medical or recreational programs to 29, more than half the country.
Weed stocks were already having an incredible year but the group rallied further on the good news. Here are the annual gains for some of my favorite weed stocks.
- Canopy Growth Corp (CGC) +320%
- Aphria (APH) +401%
- Organigram (OGI) +302%
- Terra Tech (OTC: TRTC): +344%
As you can see weed stock are sitting on big gains. But I still think it’s still the first inning – I think there is plenty more upside to come.
My plan is to keep holding and keep riding the wave.
That’s it for now. Ill be back in a few weeks with another update.
Your Investment Partner,
Mike
Disclosure: Michael Vodicka shares of Canopy Growth Corp (CGC), Aphria (APH), Organigram (OGI), Kush Bottles (KSHB), Terra Tech (TRTC), GW Pharmaceuticals (GWPH) and Cara Therapeutices (CARA).
This report is for entertainment purposes only. Every investor should consult with an investment advisor before making investment decisions. The Vodicka Group, Inc. is not a broker/dealer. We do not receive compensation for mentioning stocks. At various times, the clients, publishers and employees of Vodicka Group, Inc., may buy or sell the securities discussed for purposes of investment or trading
