Psychotherapist: Is the bear market rally in the room with us right now?

This bubble chart here shows the performance YTD on the x-axis and the 2-week performance on the y-axis.

Notice how the best performers this year, large-cap growth stocks, have lagged this month, while the worst performers of 2023, small-caps in general, have been the leaders:

It's just another way to visualize the rotation.

If you're in the camp that this entire year of record gains is just a "bear market rally", one of the more hilarious oxymorons if you ask me, then the last thing you want to see is continued sector rotation.

If you're a trend follower, because well, asset prices trend, then you're used to this rotation happening.

This is just the next phase of a bull market and perfectly normal.

And so why do we even care whether it's a bull or bear market? Because we want to know how to allocate our time.

Should we be spending more time looking for stocks to buy (which is a good habit in bull markets) or do we want to spend more time looking for stocks to sell (a good idea in bear markets)?

We've been looking for stocks to buy and that has obviously worked out very well. We'll keep doing that until the market proves that it's no longer the best approach.

In the meantime, our Under The Hood report is a list of stocks showing an unusual increase in investor interest.

This is a long AND short scan, so we find it helpful regardless of the market environment:

Just because more investors are interested in a stock doesn't mean we want to buy it. Maybe we want to fade their enthusasm.

I'm good either way. We just want a favorable risk vs reward.

This list is a good one to find ideas.

Check it out and let me know what you think!

JC