At a doctor’s appointment this morning, knowing what I do for a living, he half-asked, half-stated, “Isn’t it time to buy?”. I laughed and said, “Well, I’m not your Advisor but the simple answer is no, not yet.”
My normal behaviour when not working is to avoid conversations regarding the stock market, be it with friends, Uber drivers or anyone else. I’m quite sure doctors feel the same way! However in this case, I found myself wanting to show him why I answered the way I did. He appeared eager, and therefore I directed him to open stockcharts.com and input the symbol for a stock he wanted to buy. He quickly typed NVDA (Nvidia). No surprise there.
Nvidia has captured the imagination of many, especially for those watching its meteoric rise over the past few years and feeling like they “missed the boat”. A few clients had asked me in the latter half of last year if it was “too late to get in” and my reply most often was, “Probably, but remember, you already own it in your S&P500 index, where it is the 3rd largest company in the index/US”.
As of this writing, the S&P500 is currently down over -10% year-to-date and NVDA is down -26%, during this same time-frame.
I explained in a very abbreviated manner to my doctor how to read the 5-year price chart he was looking at (see below). While it’s true NVDA is still trading above it’s longer-term 200-day moving average (east/west red line), it has “broken down” below its 50-day moving average (green line), and the next support level is well below where it’s trading today.
*Chart courtesy FactSet
In looking at some of the other big players at the top of the major US indexes - whether it be Apple, Microsoft, Amazon, Meta or Alphabet (Google), all have fallen below their 50-day moving average and still not cheap enough (in my opinion) to consider buying…yet.
As a final comment and perhaps most importantly, until the tariff nonsense is off the table, no one needs to rush in and do any equity buying right now, anywhere. I’ve written many times about the value of patience, and it’s now more imperative than ever, during these volatile periods, to sit tight. Spring is upon us, so my advice is to get outside in nature, and refrain from checking your portfolio every day – you won’t regret it!
Libby
As a reminder, I am always happy to take referrals. If someone you know could benefit from a second opinion and fresh perspective, it costs nothing and can be invaluable for those who feel they’re not getting the care and attention they deserve. Please pass along my contact information to them. Thank you!
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