You Won’t Want These Stocks in Your Portfolio Come Fall

Right now, the biggest topic on everyone’s minds (aside from the Fed, of course), is volatility.

Now, we’ve been in a sideways trading range since the end of July and saw some nice gains on Monday.

But since 1950, September’s actually turned out to be a tough road to hoe for the markets.

In fact, the DJI has declined, on average, by 1.1% while the S&P 500 has averaged a drop of 0.7%. And if you look at the NASDAQ, you’ll see that since its inception in 1971, it too, has fallen on average by 1% every September.

So checking your holdings and cleaning out those stocks that could hurt you the most over the next few weeks has never been more important.

And don’t worry about figuring out which ones those are.

I’ve got the top 10 threats to your portfolio right here…

Check for These ETFs and Tech Stocks Before September 22nd

Though there hasn’t been a lot of huge movement in the stock market, the sentiment so far this month has been largely bullish.

But September is what I call a “flip-flop” month, and even my own proprietary tool, Money Calendar, shows a major change in mood very soon…

[Editor’s Note: Money Calendar crunches billions of date points on over 250 of the world’s top stocks and ETFs and pinpoints the best money-doubling trade opportunities. To learn more about Tom’s Money Calendar Alert, click here.]

Now the month starts out seasonally green, with the bulls outweighing the bears. But mid-way through, that sentiment changes, and the bears start moving in. So if the equities you’re currently holding in your portfolio haven’t been doing well, they may not do any better when the markets start become bearish.

One reason attributed to the late-September decline is that is investors are back to work from their summer vacations and trading a lot more. Instead of setting their trades and jetting, they’re focusing closely on their trades and their portfolios as they gear up for the holiday season.

Another reason is that September marks the end of the fiscal year for many mutual funds. So investors and money managers tend to sell off their biggest losing stocks and buy the best winning stocks. This also falls closely in line with what’s called the “last two, first four” trading pattern, where money managers “put their clients’ money to work” by investing it into the markets in the final week of the month in order to generate returns. So investors who use this pattern buy on the second-to-last trading day of the month and sell on at the close on the fourth trading day of the following month. And this moves the markets, adding to volatility.

And as I mentioned to you at the beginning of the month, the best time to get prepared for volatile days ahead is when the markets are calm.

So I used my proprietary tools and searched for the stocks showing the largest percentage decline within the next 30 days and those that performed poorly over the summer months.

And these are the top 10 stocks you might want to look for in your portfolio before the tides

As you can see, technology stocks (SPWR, SCTY, PLUG, and FSLR) and ETFs (UVXY, and TZA) really dominate this list. The others are a mixed bag of biotechnology, volatility, retail, and oil, gas, and energy stocks (MNKD, VXX, NE, and ANF).

So take a look at your portfolio and see if you’ve got any of these holdings. It may be time to take some action.

And if you’re curious about the stocks that have done the opposite and are nearing, or have already hit, their 52-week highs, this is a great starting point.

To your continued success,

Tom Gentile

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