Don't Make This Bull Market Mistake

It took four months for me to realize my mistake. But once I did, I couldn't stop kicking myself.

When you're looking at an investment opportunity, there are a lot of ways things could go wrong...

You could make a mistake while analyzing the macro picture... mess up the forecasting on future earnings... or misjudge what the Federal Reserve will do next...

Or a black swan could come out of nowhere and blow up an idea that's perfectly on track.

The worst, though, is when we get the big-picture story completely right... but choose the wrong investment to take advantage of it.

Unfortunately, that's exactly what happened in January 2023. Today, I'll share my mistake – and how you can avoid it right now.

Getting the Big Picture Right Isn't Good Enough

It's easy to forget this today, after an incredible few years in U.S. stocks... But in early 2023, investors were in a fragile state.

The 2022 bear market had bottomed a few months earlier, in October 2022. But at the time, no one knew it.

Folks thought they'd seen the same pattern before. Throughout 2022, the market rallied several times before bottoming, making one lower low after another. By January, fear was ruling the day. Most investors expected stocks to slump again and hit new lows.

But when I analyzed the big picture, it was clear that the consensus was dead wrong.

Stocks had crashed in 2022 for two big reasons: inflation and high interest rates. But by the beginning of 2023, inflation was moderating faster than most believed. And that would eventually set the stage for lower interest rates.

In short, the problems that caused the 2022 bear market were nearly gone – even though few realized it. And that shift was setting us up for a major bull market. As I wrote to my True Wealth subscribers in January 2023...

The Fed was forced to hike interest rates to get inflation under control. And global stocks and bonds lost more than $30 trillion last year as a result.

Now, everyone expects the worst to continue. They see the devastation and assume the hits will keep coming. They expect another aftershock, with even worse consequences.

They're dead wrong...

The pandemic aftershock is nearly over. Inflation is falling, and fast. And that means the Fed will be able to ease up on its rate-hiking venture.

That's exactly what happened. Inflation fell throughout 2023. And stocks absolutely soared. The S&P 500 Index rallied 26% that year.

This should have led to big gains. But it turned out, I made the wrong bet...

I didn't recommend buying the broad market in January 2023... or the technology sector. Instead, I recommended biotechnology stocks.

It seemed like a smart way to play a market rebound. But it didn't work out as I hoped.

Two years later, the S&P 500 was up more than 50%. A leveraged bet on tech stocks was up more than 200%. But the biotech fund I'd recommended? It managed to lose money.

The saving grace is that four months after that biotech recommendation, I did see the potential elsewhere in the market. So I recommended a similar trade with a leveraged technology investment.

It ended up doubling in a little more than a year.

This situation reminded me of an important lesson... Getting the big picture right isn't enough. You have to get the specific investments right, too.

Overcomplicating Things Will Cost You

This is crucial to remember right now. We're in the middle of a powerful bull market that has been raging for years. But folks are always looking for reasons to worry.

When you worry, you tell yourself that you need to act... and that the only way to get ahead of the danger is to outsmart the market. So you overcomplicate things. You make moves you probably shouldn't.

That logic, unfortunately, is the opposite of what you should do in a setup like today's.

In a bull market, overcomplicating is your enemy. Instead, your only goal is making sure you're along for the ride.

Folks have been stressing about the high concentration in today's market... the potential downfall of the Magnificent Seven... and the seemingly fragile state of the U.S. economy. And yet, stocks are approaching new highs once again.

If you overcomplicate things, it'll cost you. So I urge you to keep it simple.

Own what's working, and forget about what's not. If you don't try to outsmart this bull market, you'll make a lot of money in the months ahead.

Good investing,

Brett Eversole

Editor's note: Artificial-intelligence stocks are soaring to dizzying heights... the mainstream press is churning out ominous headlines... and lots of folks are sitting on the sidelines, afraid to get into this boom. If you're not ready, you too could miss out on the rare situation that could soon mint more millionaires and billionaires. It's not too late to get in – in fact, the most profitable run of this bull market could still be ahead.