Hey, Ross here:
Stocks have been choppy.
And Treasury yields have been surging to multi-decade highs.
So it seems natural that a lot of retail investors have decided to “pivot” from stocks.
Let’s take a look.
Chart of the Day
Retail investors just made their largest rotation into long-term Treasury ETFs on record.
A huge chunk of that money went into TLT – the 20+ year Treasury bond ETF.
And I understand the appeal.
TLT owns long-term U.S. Treasuries.
So with yields this high, the trade sounds pretty simple:
Collect a nice yield…
And avoid some of the craziness in stocks.
But TLT is not the same thing as sitting in cash or buying a short-term Treasury bill.
These are long-duration bonds.
And long-duration bonds can move hard when interest rates move.
If long-term yields keep climbing, the value of the ETF can keep falling.
So retail isn’t simply collecting a high yield here.
Whether they know it or not…
They’re ALSO making a pretty big bet that yields are close to a top.
And if they’re wrong…
The price of TLT can keep falling fast enough to wipe out a lot of that yield.
Now compare that with what’s happening in the more aggressive end of the stock market:
Semiconductors and tech hardware now account for roughly 47% of the Nasdaq 100 ETF…
And around 45% of the S&P 500 High Beta ETF.
That’s an enormous concentration.
So while retail has been making a record move into long-term bonds…
Some of the strongest areas of the stock market have become even more concentrated around a handful of aggressive industries.
Two very different trades.
And two very different places to put your money.
Insight of the Day
A “safe” trade can still be a bad trade.
This is why I don’t like judging a trade by the label attached to it.
“Treasuries” sounds safe.
But buying a long-term bond ETF while yields are still ripping higher can still be a losing move.
The entry matters. The trend matters.
And what the other big players in the market are doing matters too.
That’s especially true in a market like this one.
Money isn’t moving evenly.
It’s piling into certain areas and leaving others behind.
So rather than going with “What sounds safest?”...
I’d rather know:
Where is the serious money actually building positions?
Because if we can spot where the biggest players are putting their money…
We can potentially ride the move right alongside them.
The good news is, despite their many advantages, large institutions have a problem you and I don’t have.
They’re too big to jump into a stock all at once.
If they want to build a major position, they usually have to work into it over time.
And that buying can leave tracks behind.
I call them “smart money footprints”.
Tomorrow, I’m going to reveal a unique strategy for following these footprints…
Using a strategy that currently has a combined 2,615% in gains across 20 open positions…
So make sure you keep an eye out for that.
In the meantime, if you missed my LIVE YouTube session this morning…
Click here to check out the replay now.
Customer Story of the Day
“Best service available, and I have tried them all.
Ross is the only one who spends his time trying to TEACH you how to do it rather than telling you buy this sell that.
It's like the old saying, "Give a man a fish you feed him for a day, Teach a man to fish, you feed him for life".
As a lifetime private trading club member I would Highly, Highly recommend TA to anybody, and I have recommended it to several of my friends and family.”
Embrace the surge,
Ross Givens
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