This is investing 101. If you want to know how to invest in the stock market right now, you need to understand why the 2008 stock market fell. The stock market in 2008 was the same as the stock market in 2024. AI stocks and tech stocks are rallying, while the best dividend stocks remain undervalued. So to understand how I pick the best stocks, this stock investing for beginners video will show you the best stocks to buy now. The best stocks to buy in 2024, which are the best stock to buy now as well as the best stocks to buy tomorrow, are those stocks that are rising as this 2024 market crash gets started. Even though we’re seeing a stock market correction right now, or possibly as stock market crash in 2024, stock market investing looks at the long term. Stock analysis has shown that even if we are entering a bear market, sector rotation in the stock market is providing some great buying opportunities. Is the stock market for beginners? You bet! Let’s look at the latest sector analysis and stock charts to see which stock sectors are rising. I’m giving you the top 5 stocks to buy now, the top growth stocks to buy now, and looking at sector rotation swing trading to find some great stock trading opportunities. So let’s dive into the top stocks to buy now and see what moves the stock trading pros are making in the stock market right now.
If you overlay a chart of the Nasdaq from 2024 on top of a chart of the Nasdaq from 2007 to 2008, they look almost identical. There’s a saying that “The most dangerous saying on Wall Street is ‘This time is different’.” That’s because this time is never different. History always repeats itself. But did you know there were a few people in 2008 that positioned themselves correctly, and they made millions in the stock market? In 2008, I was working for Merrill Lynch, and I was working in the securities lending department. In other words, we shorted stocks. And we were one of the only departments in the company to make money that year.
What I want to do in this video is show you what is happening in the stock market right now, kind of explain why it’s happening, but most importantly, I want to show you how people positioned themselves in 2008 to make a ton of money and how you can also position yourself. And it’s not all shorting the market with put options and shorting stocks. There are actually stocks that went up in 2008. And I’m going to show you what sectors are expected to rise even as the market falls.
We all know that over the past two weeks, mega-cap tech stocks have been falling, as shown on this daily chart of the Nasdaq. But you might not have known that the Russell 2000 is actually rising. The reason for this is because the Nasdaq is largely made up of large mega-cap tech stocks, and the Russell 2000 is made up of 2000 small and medium sized businesses. A lot of people think that the overall stock market has been rallying over the last year and a half, but in reality, that’s not actually true. And now there’s a major market shift taking place, and you need to make some changes in your portfolio in order to take advantage of this shift.
Mega-cap tech stocks that have rallied for the last almost two years now are starting to go down. That includes stocks like Microsoft, Nvidia, and Apple. But even though the tech sector has been falling, other sectors have been rising. While technology is down, healthcare, industrials, utilities, and basic materials are all up. Why are technology stocks falling while the rest of the stock market is starting to rise? It all has to do with sector rotation. People don’t keep their money in the stock market in particular stocks for very long. They move their money out of certain stocks and into other stocks. Remember, even as the overall stock market goes down, this does not mean that everybody is losing money. Money doesn’t just disappear, it changes hands. So our goal is to figure out where that money is going from and where that money is going to. We want to sell those stocks that people are pulling money out of, and we want to put our money into those stocks that people are buying.
Take a look at this sector rotation chart. And as we know, we have been in a bull market for a while now. In a bull market, technology is one of the first things that starts being bought, and later on it becomes industrials and basic materials as we start to reach a market top. So what we want to do as we move from this bull market towards a market top, is we want to get out of technology and we want to get into things like industrials and basic materials. That’s because the stock market is starting to reach a market top, and what people invest in is going to start changing drastically.
The reason this is happening right now is because technology, well specifically the mega-cap tech stocks, have been rallying to insane valuations. And these rallies never last forever. They always end at some point. And it looks like the charts are showing us that the rally is over. And these stocks are going to start to have a pretty significant pullback. Technology stocks have been rallying for almost two years now, but they’re now reaching the distribution stage where they’re topping out and starting to go down. On the other hand, most of the stocks in the stock market have been in the accumulation phase for the last two years, and they’re just now starting to go up again.
Money doesn’t disappear. It moves from one sector to another. The S&P 500 hit a top in December of 2021, and then hit a bottom in October of 2022, as you can see here on the yellow and red circles. Since then, it has rallied to new all time highs, massively going above the 2021 highs. This is all due to those few mega-cap tech stocks that have rallied. But compare that now to the Russell 2000, which is a very different story. Just like the S&P 500 it hit a top in December of 2021, and just like the S&P 500 it hit a bottom in October of 2022, as you can see here on the yellow and red circles. But this is where the Russell 2000, in other words, most of the stock market, varied extremely differently from the S&P 500. If you look at the green here, the Russell 2000 remained in a bear market all the way through November of 2023. While the S&P 500 was rallying to new all time highs, the rest of the stock market remained in a bear market. Now since November of 2023, for the last ten months or so, the Russell 2000 has started to rise. And over the last three weeks as technology stocks have crashed, the Russell 2000 has rallied. And yet, the Russell 2000 is still below the 2021 highs, as you can see with the green arrow on the far right of this chart. That means the Russell 2000 still has a lot of room to run up.
So while the technology stocks are starting to fall, and people are getting out of them and taking profits, the rest of the stock market is starting to rise, and it is about to go on a pretty nice rally. But that means you’ve got to pull your money out of tech and move it into something else. Now in a minute, I’m going to show you exactly where you should be moving your money for your long term investments. But first, I want to talk about trading. During this time, the stock market is going to be extremely volatile, and there’s going to be a lot of stocks rallying, a lot of stocks falling, and we’re going to see some massive intraday movements on stocks. A lot of this is because of earnings. We have a lot of companies reporting earnings this week that are going to have major impacts on the stock market. Tuesday after the close, AMD, Microsoft, and Starbucks report. Then Wednesday after the close, Meta and Arm report. Then Thursday after the close, Amazon, Intel, Apple, and Coinbase all report earnings, as well as Moderna in the morning. And then Friday before the open, we switch to energy stocks with ExxonMobil and Chevron reporting. And so far the company earnings have not been great, which is why we’re seeing these technology stocks fall.
That said, there are opportunities to make a lot of money in the stock market this week if you want to get into day trading. If you do day trade, I strongly recommend you follow some very successful day traders and copy their trades. That’s the entire point of my Stock Dads Discord, is to provide trade alerts to you from full time, professional, multi-millionaire traders. On average, our traders have a 74% win rate with an average 51% profit per trade. People like you are making real money in the discord every single day. Just last week on Monday, PyroHigh made a 340% profit on a CRWD put option. Then on Tuesday, Lee made a $1,700 profit in his portfolio, while Ivan made a $1,100 profit in his portfolio. On Wednesday, stephen made a 100% profit on a Google Call option, before Zach on Thursday made a 100% profit in just 45 seconds on a NOW call option. Then on Friday, Jada made an 88% profit on an SPY put option while laying in bed sick trading on her phone. Those who weren’t sick on Friday and were able to get up out of their bed and trade on their computers, made even more money, with alvinj21 making a 159% profit on a SPY call option and yucknothanks making a 223% profit on a SPY call option. So come join the over 20,000 traders who have already signed up for the Stock Dads Discord and are making money with us. You can start getting trade alerts today by signing up here.
Now let’s talk about what long term investments you might want to make in your portfolio to cover this changing shift in the stock market. Obviously we can just short the stock market. You can short the overall stock market or short individual technology stocks. If you like to trade options, you can perhaps sell some credit call spreads, or you can buy some put options, both excellent ways of making money as the overall market goes down. But if you don’t want to trade options and you don’t want to short stocks, there is another way that you can make money. And that is by moving your money out of stocks that are starting to fall, and moving your money into those sectors that are starting to rise. So let me show you which stocks in each sector are starting to rise that you might want to consider moving your money into.
One of the sectors that’s starting to rise is Basic Materials. And here are the top stocks in the Basic Materials sector that you might want to consider. Stocks like LIN, SHW, SCCO, ECL, FCX and APD. Another sector that’s starting to rise is Industrials. And some of the best stocks in this sector include GE, CAT, RTX, UNP, HON, LMT, ETN, BA, UPS, and DE. And you might recognize UPN from my last video where I talked about this being one of the best dividend stocks to buy right now. The third sector that money is starting to move into that you might want to consider is Utilities. However, a lot of these utility stocks have already been running up, so you’re going to have to be very careful with these. This sector isn’t quite as good as the other sectors, but some of the stocks that you might want to consider include NEE, SO, DUK, CEG, and AEP.
Now normally healthcare would be going up as well. However, healthcare stocks have been rallying just right along with technology stocks. So in this particular case, you’re probably going to want to stay away from healthcare. Just look at some of these insane PE ratios on these healthcare stocks. These look like tech PE ratios. It is absolutely insane. You definitely want to be staying away from the healthcare sector. However, there are a few healthcare sector stocks that you might want to consider. Those three stocks include JNJ, ABT, and PFE. Those are three stocks that have not participated in the recent rally that the overall healthcare sector has had.
Let me know in the comments below what changes you’re making to your portfolio in order to take advantage of this changing market shift, and what you’re going to be buying and selling. And if you’re trading any options, let me know what your options play are as well. I’d love to hear your thoughts and get your feedback. Let’s have a discussion in the comments below. I’ll take a look at some of your stocks and let you know my thoughts as well. So let’s help each other out. Let’s talk about what stocks we’re trading in the comments below, and hopefully we can all get some great ideas from each other.