What I learned from the Crash of 2022

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The big correction in the SP500 that was triggered on January 10 until October 18, 2022 brought me to several thoughts that I want to share with you briefly, so that we understand the market in the simplest way possible, leaving aside the emotional extremes of Greed and Fear.


Lesson:

The SP500 ES may fall, but that doesn't mean all stocks will fall. Some companies have had a spectacular rise despite the fall of the most important index of the stock market.

The reason why some stocks did not fall so dramatically was because they were already "cheap" in the eyes of investors and enjoyed good fundamentals that supported corporate earnings.

One case of a strong company that grew tremendously during the SP500 crash was Merk MRK.

The stock rose +20% while the ES fell -27%


Conclusion:

Do not be afraid of the fall/correction in the indices. Great investment opportunities can be found despite bearish movements.

Things to Avoid in a context of Bearish Indices:

Avoid investing in shares of companies with negative Earnings, bad financial balances, a lot of debt, sectors with little interest and little cash flow.

How to spot Opportunities:

One of my favorite ways to scout for solid companies to invest in is to look among the holding companies for the SCHD and JEPI ETFs. I usually analyze the first 50 stocks of each ETF.

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Thank you!

Location: Wall St, New York, NY, EE. UU.

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