Today I sold the 12 Utility stocks that were purchased as a hedge on January 19, ahead of the Inauguration. The hedge worked. The “bottom of the barrel” COVID recovery stocks have since stagnated or consolidated while the Utilities have delivered a double digit return.
In the wake of the 4th COVID wave, I think the Reopening trade should rebound. So I’ll plow the proceeds from my Utility stocks into core holdings that have pulled back over the previous few weeks.
If you’re looking for a buy point to take advantage of the Reopening, but don’t want to own individual stocks or if you’re stuck in a limited choice 401k, then I’d suggest shopping for a Small Cap fund (RUSSELL 2000 index). IWM is an exchange traded fund in that category. IWM appears to be rebounding from a brief correction. It’s sitting exactly on the intersection of its 50dma & short term exponential moving average, possibly setting up for a breakout to a new high.
As always, invest with C A U T I O N !
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