Focus on Market Fundamentals as Momentum Goes Red

Stock Market Fundamentals

The S&P 500 took a punch this morning and momentum went negative yet again for the index. This has been one of the most difficult markets to navigate in my lifetime. The prolonged weakness in small-cap stocks has continued to frustrate any investor looking for value in the market. And the on-again, off-again nature of COVID concerns makes it even more uncertain as we head back into the fall months. One of the things that I think is so important right now is that investors take the time to start focusing on market fundamentals once again.

Don’t get caught up in wild speculation around the next cannabis stock. Focus on the longer-term trends and healthy balance sheets. Focus on the companies that have true strength in their numbers. That is why I am always talking about the Piotroski F-score. When a company has a high F score – ranging between 7 and 9 – it means that they have improved their balance sheet over the last year. And this is important. Because the companies that are thriving now are the ones that will continue to do so in this sobering new reality in which we live.

I just got my third shot of the vaccination on Wednesday. I feel like a bus hit me this morning. But it’s a reminder that this disease is not going away anytime soon. There will be more variants. There will be more booster shots. This will be a part of our lives for much longer. I know that isn’t the most uplifting message about the state of our affairs. But it’s a good reminder that there are things outside your control that simply aren’t worth our time anymore.

More Than Stock Market Fundamentals

The three things you can always control are your health, your wealth, and yourself. So, I’m looking at the next 90 days as an opportunity to do more than just invest. I’m committing to a new diet, I’m focusing on spending more time with my daughter on the weekends, and I’m going to start outlining my next novel before a one-month push to knock out 50,000 words in January.

We have to make the very best of things. And even though this market is a bit sideways, we can continue to play both defense and offense. There will be ample opportunities to make money, we just have to approach this market from a different direction and stay ahead of the institutions.

I’ll be back tomorrow to talk about two new F&Z Score stocks and my favorite way to trade them.

Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.
Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.

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