Tech sold off. Defensive stocks rallied. The Investing Club wants to help you make sense of it.
Here is the sense. Money moved from things with dreams to things with dividends.
Defensive stocks are the companies your grandfather owned. Utilities. Consumer staples. Health care. They sell electricity, toothpaste and pills. Nobody has ever called a toothpaste company "disruptive." That is why they are up.
For years, you mocked these stocks. You called them boring. You said a regulated water utility could not possibly keep up with a chatbot that writes your emails slightly worse than you do.
Today the water utility did not care. It kept delivering water.
The Homestretch arrives every weekday afternoon. It is designed for the last hour of trading. That is the hour when you will sell your tech shares at the low and buy a utility ETF at the high. Then you will call it a "rotation." It is not a rotation. It is a panic with a spreadsheet.
The chart does not know why tech fell. The chart does not read the Investing Club. The chart saw sellers, then more sellers, then you. You were the last seller. You are always the last seller.
Consider the defensive stock. It does not tweet. It does not hold a launch event in a black turtleneck. It raises a dividend by two cents and goes home. That is a better work-life balance than anything you have achieved.
Somewhere tonight a retail trader will check his tech holdings, then Google "what is a consumer staple." He will find out it is soup. He will buy the soup at the top.
Soup has a 3 percent yield. Your portfolio has a podcast.
Photo by Marija Zaric on Unsplash
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