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| Get Off Your @&$ and Start Trading... We Hit 3 Winners per Day in January! | | Ryan Fitzwater, Associate Publisher, Monument Traders Alliance |  | Once a month, we are giving Trade of the Day readers a special look into the trends we are tracking and trades we are making in The War Room. And in January, we absolutely crushed it... |
| | | January was an epic month for retail investors.
Our trading community, The War Room, had one of its best months ever, locking in 58 winners out of 64 trades with a win streak of 31 plays at one point!
We were not alone... Retail investors around the country are having an enormous impact on the stock market this year, and we're only a month in.
The market phenomenon that occurred on GameStop, AMC Entertainment and BlackBerry was driven not by Wall Street powerhouses, but instead by average Joes investing on their smartphones.
Masses of newbie traders with less than a grand in their accounts bet against billion-dollar hedge funds in support of companies they believed had value.
What followed was remarkable - a battle of wills that eventually led to some brokerages shutting out retail investors from buying specific stocks.
With class-action lawsuits and Senate Finance Committee hearings pending, the outcome of the conflict is not clear yet.
What is clear is that the retail investor will play a very big part in the markets this year.
A New Army of Traders
A record 10 million retail investors opened new brokerage accounts in 2020.
It was combination of factors that lead to this massive jump in new investors: - Commission-free trading that started years ago swelled in popularity.
- COVID-19 measures left millions stuck at home with extra time on their hands to learn about the markets.
- Those unable to bet on sports or visit casinos turned to the markets for a new fix.
- Stimulus checks left many flush with new cash to play with.
Without a doubt, it's one of the reasons The War Room community grew in 2020. We are pumped that so many are joining the trading revolution and taking their financial fate into their own hands, and we are here to help them achieve daily profit taking.
We have a super-engaged community. So it's no surprise to hear that all these new investors were also highly engaged in their brokerage accounts. As you can see, investors have been logging in to their accounts more than they were at the beginning of the pandemic.
And here's the thing... This chart shows only desktop and mobile traffic. It doesn't include app usage. Many brokerages are seeing significant engagement on apps, and that trend isn't fading.
According to Apptopia, on Wednesday, Robinhood had its most single-day downloads, recorded its highest number of daily active users and ranked No. 1 in the Apple App Store.
A record amount of new retail investors who are actively engaged in the markets is just another factor in support of "stockflation."
Stockflation and Biden's Big Package
Since COVID-19 hit, the money party has been bumping - and it doesn't look like it's going to stop anytime soon. President Biden has proposed a fiscal package almost as big as what was in the Coronavirus Aid, Relief and Economic Security (CARES) Act, the original COVID-19 relief package. As we all know, the CARES Act put needed cash into Americans' hands. And a portion of that money was pumped directly into the stock market, as millions of stuck-at-home investor newbies decided to start investing in their future.
The president's relief package would put more powder in their kegs and bring millions more into the fold.
But is it a smart move for these retail newbies to get into the markets now? At all-time highs?
Wall Street Bets With Momentum
Let's consider the markets today.
At the end of 2020, the S&P 500, Dow Jones Industrial Average and Nasdaq all closed at all-time highs.
"All-time highs? Time to sell!" is what many pundits are saying right now, especially professional doom-and-gloomers.
And sure, we've noted in The War Room that many stocks and sectors look "frothy." We are being cautious with our approach and hedging when necessary.
But when you look at historical data, "Buy high, sell higher" is the smarter way to approach markets in 2021.
Bank of America recently ran the numbers, and, I admit, I was surprised... "Since 1871, buying the market when it closed the year at an all-time high offered a better-than-average return the following year. A 15% average return the following year vs. 10% for other years."
That is a 50% outperformance going long the year after markets closed at an all-time high. This shows why buying high and into momentum works. As you can see, the number of years that stocks finished at all-time highs over a previous year that had done the same is substantial. Happening 28 out of 32 times, the trend has held up. Using history as a backdrop, we have an 87.5% chance that stocks will finish higher this year.
I know it seems counterintuitive, but that is why taking emotion and fear out of trading is key.
"The trend is your friend" is the better investment cliché to focus on right now.
And again, the markets have big fiscal and monetary support coming. No one can accurately predict what stocks will bring investors in the short term. But based on historical data and the fiscal and monetary support being thrown at the markets, the bullish case for 2021 is very, very sound.
The stock market has a track record of outperforming expectations. Now is not the time to doubt it.
And in The War Room, we know from our successful trading last year and so far in 2021 that sitting on the sidelines thinking stocks are too high and can't go higher is a bad bet.
Just look at what our members are saying...
Thom 1/26/2021 at 10:10:37 a.m.
In @ $10.40 out at $15.75 = 51% in a day (well over 12,000% annualized). My ROTH IRA thanks you BB!
AnTonyO 1/25/2021 at 2:09:28 p.m.
Bought a $12.50 Call on SDC based on Karim's earlier post, just made 39% in 12 minutes!! Thanks Karim!!!
Tad 1/27/2021 at 9:40:13 a.m.
In @ 1.89 out @ 3.25 for a 72% pop overnight. THX BB!!
Chris H. 1/25/2021 at 10:11:05 a.m.
BIG SHOUT OUT to BB and Karim! I have made A LOT of money this morning (5% on entire portfolio) based on current active trades and also trades I've made based on information from The War Room. This place is awesome!
Ready to get into the game? Ready to hit 58 winners in one month - three winning trades per day - for a 91% win rate? Click here to find out how War Room members are making huge gains... overnight!
Hope to see you in The War Room, |  | Ryan Fitzwater, Associate Publisher
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