If you’ve been following me this year, then you’ve heard me talk about this incredibly crazy volatile market. We’ve covered many stocks to watch, but what about stocks you should ignore?
It’s been a wild ride for traders so far in 2020 … and there are no signs of it slowing down.
In fact, there are so many plays that there’s no reason to sit in FOMO. Even if you miss a trade, there seems to be another just around the corner.
This trader’s market is so hot it’s even drawing longer-term investors into the short-term trade game.
With so many plays, it’s important to set boundaries that will help you to use your limited time and resources to catch the right setups. One of the best ways to do this is to know what you’re gonna ignore.
Listen … saying no to the wrong things is just as important as saying yes to the right things. Saying no is a super important part of controlling your thoughts and emotions — something you’ll need to do if you wanna avoid costly mistakes.
So, today I’m gonna talk about something different…
Instead of handing you a list of stocks you should be watching … I’m gonna talk about which stocks, in my opinion, you should ignore in this volatile market.
Having trouble in this wild market? You’re not alone! Get the no-cost two-hour guide that my mentor and friend Tim Sykes released recently, “The Volatility Survival Guide.” I even put in an appearance to help you get the most out of your scanners.
Table of Contents
Stocks You Should Ignore in This Volatile Market
Alright, let’s get to the meat. Here the top stocks I think you should stay away from as we face the never-ending pandemic ‘norm.’
Old-Line Retail Stocks
It’s no secret that brick-and-mortar retail has been facing major threats even before the coronavirus pandemic.
I mean, they even gave it a name: retail apocalypse. So when I think of stocks you should ignore, these come to mind first.
I’m a child of the 80s and 90s, back when it used to be really fun to hang out at the mall. Heck, I’d even say our lives revolved around it.
But now malls are dying.
I don’t know the last time you went to a brick-and-mortar retail store to shop for clothes or anything beyond essentials … But I’m willing to bet you’re going a lot less than you used to.
Online retail giants like Amazon have made it too easy to order what we want from the comforts of our homes … And in this strange new retail world, convenience is key.
Now that the pandemic has forced the country to go into lockdowns, partial lockdowns, and slow reopenings — I think a death blow is landing hard on a lot of different brands that some of us refer to as old-line retailers.
The retail apocalypse doesn’t care about your brand reputation.
Nordstrom announced it’s permanently closing stores across the U.S. and making staff cuts. J.C. Penny filed for bankruptcy and plans to close 242 locations. Sears is fading away.
And the list goes on…
With the uncertainty old-line retail companies are facing in the pandemic, I’m staying away from their stocks.
Stocks You Should Ignore: Cruise Lines
Some traders think that airline and cruise line stocks will take off again.
Here’s what I think…
We still need airlines for business and personal travel.
If you’re going to Europe, you’re not taking a boat there. If you live in Maine and want to visit your brother in Arizona, you’re probably not gonna drive.
Let’s face it … Until someone invents a teleportation device to get your physical body to another country, flying is the most convenient way to get around the planet.
In fact, airline stocks could eventually be a good potential dip-buying opportunity.
Cruise lines, on the other hand, are a different story. Personally, I thought cruise lines were disgusting way before the pandemic.
Even a year ago, I had no interest in going on a cruise. Thousands of people jammed into a floating sewage container stuck out at sea? No thanks.
Now that the pandemic has shut that industry down, there’s no way for them to make money.
In fact, the pandemic claimed its first cruise line victim. Carnival Cruise Line canceled all trips until October and is seeing more problems stack up due to the pandemic. Norwegian Cruise Line extended its cancellations.
With so many companies in danger of bankruptcy … I’m staying far away from these stocks.
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Chinese Stocks
I’m sure you’ve seen the news about Chinese stocks. It’s not just President Trump who’s after them. Congress is talking about delisting Chinese as well. Is that enough to put these on your list of stocks you should ignore?
Let’s break it down … The U.S. and China already had high tensions during trade deal negotiations after President Trump said the previous deal wasn’t fair.
Now that it’s confirmed that China withheld crucial coronavirus information at the start of the pandemic outbreak … And trust between our two countries is broken.
It doesn’t help that Luckin Coffee, one of the hot Chinese stocks from earlier this year, was exposed for fabricating half of its sales from 2019.
Here’s the thing … There has to be trust in the market in order for it to work. If traders and investors can’t trust that market information is accurate, it’s gonna prevent them from buying or trading. The risk just doesn’t seem worth it.
If tensions cool and there’s a solid trade deal confirmed, I may change my mind. But in the meantime, I’m avoiding Chinese stocks.
Restaurant Stocks
The pandemic has been brutal, forcing many businesses to shut down. It’s been particularly rough for restaurants. So these stocks are on my list of stocks you should ignore.
Profit margins are usually tight in this industry. And when you don’t even have a steady flow of customers coming in, it can be deadly to their bottom line.
Some experts are predicting that one in five restaurants will permanently close before this is over. We’re seeing big brands like IHOP, Denny’s, Starbucks, and TGI Friday’s close hundreds of restaurant locations for good.
As if the lockdown wasn’t enough — just when cities were beginning to open up, protests and a resurgence of coronavirus cases caused customer traffic flow to pull back again.
And as we watch the uptick in new coronavirus cases across the country … there’s no telling when restaurants can go back to business as usual. I think as the pandemic goes on, we’ll likely see more and more restaurant failures and bankruptcies.
For now, I’ll be avoiding restaurant stocks.
REITs — Real Estate Investment Trusts
In my opinion, commercial real estate is screwed.
But I’m excited about manufacturing and warehousing. I think one big thing that can happen as a result of the pandemic — and our ongoing tensions with China — is that manufacturing will be coming back to the U.S.
Office space, on the other hand … it just doesn’t look good.
I think that employees being forced to work remotely has opened the eyes of a lot of companies. We may be seeing the beginning of the end of crowded corporate office spaces.
In fact, Twitter and Square are already saying their employees can work from home forever. Facebook expects half of its workforce to work remotely.
Even here at StocksToTrade, we recently told our employees to work from home indefinitely. It just makes so much sense. The commuting, the pollution, the risk of spreading illnesses — there are a lot of drawbacks to working life as we used to know it.
I don’t know if a lot of us wanna go back. And the way things are going with the pandemic, who knows when or if ‘normal’ will ever be what we knew.
Companies that own 500-unit office buildings will have to seriously evaluate their options.
Insurance companies, banks, software companies — I think they’ll all have remote workers when this is all over.
For that reason, I’m staying away from REITs.
The Wrap on Stocks You Should Ignore
Well, there you have it. That’s my list of stocks that you should ignore in this crazy volatile market.
You see, your attention works like a spotlight … you can’t catch everything with it. When you focus on something, you’re ignoring so many other things.
If you don’t choose what to ignore … you risk ignoring stocks that better fit your setups.
You gotta be strategic with what you focus on. Otherwise, you can waste your limited resources — your time, money, energy, and brainpower.
Make a list of stocks that aren’t worth the effort. Make it part of your process. It makes it easier to narrow down the top candidates for your watchlist.
If you need help learning what stocks you should ignore and which are smarter to trade, I want to invite you to join the SteadyTrade Team today. Every day we provide you with mentorship, trading education, and community. It’s all to help you build a process and hone in on the stocks that fit your setups.
And if you’re looking for a trading platform, check out StocksToTrade. It’s a platform designed by traders for traders. It has a TON of tools and resources that will please even the most experienced traders — charts, built-in scans, indicators, watchlist features, and more.
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What’s on your list of stocks to ignore in this market? Leave a comment!