Navigating Volatility: Smart Investment Moves in Uncertain Times
Welcome back to the Extreme Investor Network, where we provide you with actionable insights to help you navigate the ever-changing landscape of investing. Today, we’re diving into the latest market developments and strategic moves made by seasoned investors amid heightened volatility.
Market Reaction to Tariff Talks
As the market grapples with a tumultuous two-day sell-off, largely influenced by President Trump’s new tariff policies, savvy investors are looking past the chaos. The Dow Jones Industrial Average has plummeted over 1,000 points, registering a stark drop of more than 4%, while the S&P 500 and Nasdaq Composite have accordingly fallen by at least 5%. Trump’s announcement of a “reciprocal tariff” regime, which imposes a 10% baseline tariff and higher rates specifically on countries like China and Vietnam, has sent shockwaves through the market.
One investor making headlines during this downturn is Josh Brown, CEO of Ritholtz Wealth Management. He’s strategically leaning into stocks that he believes are poised to thrive despite the tumult. Brown has recently purchased shares of Rocket Companies, a mortgage giant that he argues is “uniquely positioned” to benefit from an incoming surge in mortgage refinances—particularly if the Federal Reserve opts to cut interest rates later this year.
The Case for Rocket Companies (RKT)
With traders already pricing in a potential for at least four interest rate cuts in 2025 due to an anticipated economic slowdown, Brown states, “Who benefits the most from a series of Fed cuts? The answer is clear—a refinance boom.” Rocket Companies has made some significant moves of its own recently, announcing plans to acquire competitors, Mr. Cooper and Redfin. As a result, Rocket’s shares have soared more than 14% in the last month alone and are up 40% over the past three months. This kind of growth in a traditionally stable sector showcases the potential upside for investors looking for resilient opportunities.
Brown notes, “This is the type of company that benefits if mortgage rates come down significantly,” and believes this could also help unlock a backlog of homes in the market that have been stagnant.
Identifying Long-Term Winners
Brown isn’t stopping at Rocket; he’s also betting on tech giants Amazon and Uber, along with energy powerhouse Chevron—each of which he expects will weather the trade war storm effectively. While these stocks have recently taken a hit, with Amazon and Uber losing between 13% to 14% over the past month, and Chevron down nearly 4%, Brown remains optimistic about their long-term potential. Notably, Chevron has seen a 12% decline this week alone due to falling U.S. oil prices, driven by concerns over economic slowdown alongside increased production from OPEC+.
In contrast, Brown is less optimistic about the future of stock market operator Nasdaq, citing recent performance that has led to a more than 11% decline in the last month and 7% drop this week. Brown indicated a cautious approach: “The only way that stock works is if the capital markets return to life and we see an influx of deal volume,” suggesting that the current landscape may not favor investment in Nasdaq right now.
Strategic Positioning for the Future
In this uncertain market, Brown emphasizes the importance of focusing on long-term core holdings that have been discounted. “If you’re going to be in it anyway, you might as well buy more stock and lower your average price,” he suggests. This philosophy not only comes from a place of tactical investment but also an understanding of market cycles.
At the Extreme Investor Network, we believe in the power of informed investing. As markets waver, it’s crucial to remain adaptive and keep an eye on opportunities that arise—even in the face of adversity. Our commitment is to provide you with insights that allow you to capitalize on market movements and achieve your investment goals.
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