The month of January and February saw a huge dip in quality stocks. Most of the dip came from high P/E or the growth stocks. It actually feels painful watching your portfolio take a 20% to 40% dive coupled with the fact that we weren’t sure where the bottom is.
This dip left investors with a negative outlook on the market. Others turned into Bonds and used Commodities to hedge their funds. However, only those with insights knew that there is always a light at the end of a tunnel.
I must say that it takes courage and a measure of experience to navigate such gloomy days in the market. Considering the fact that 2020 saw a huge gain in the market. Most companies posted good Q1-Q4. The FAANG stocks (Facebook, Amazon, Apple, Netflix, Nvidia, Google) also helped supported the indices. Everyone was expecting the same trend to continue in 2021, which it partly did and then in 2022 which it failed to replicate.
In December, the S&P500 was at its highest point at 4793 while in March it considerably dipped to 4170 points. This was a loss of about 600 points in such a time frame. The Nasdaq wasn’t also left out from this selloff. It also saw a fall from above 16,000 points to below 12,000 points in March. This was almost sounding alarm of an end of the bull market to a start of the bear market.
During this period, we kept bringing into light positives in the market. The greatest antagonist in the stock market is fear. However, for experienced investors who have seen different market seasons, we know that fearful hands lose money. So we kept buying the dip from the fearful hands that were selling off their positions.
A look at the following stocks would prove us right for buying the dip during those turbulent times and why the DCA (Dollar-cost averaging) is still the best method to navigate the Stock market.
In January, Nvidia (NASDAQ: NVDA) fell to low levels of $219. A massive dip from above $300 it kissed as of November 2021. Last week, Nvidia rose up to $265 as at the time of writing. If you had bought NVIDIA then, your portfolio would be smiling green as this time. Why was Nvidia a buy for us? They had good earnings. They ended January 2022 with an increase of 61% in revenue, which is $26 billion. The market conditions is favourable for NVIDIA as evident by an increase in demand for their products.
It’s okay if you missed out on NVIDIA's perfect entry point. You’ll always find a train that would convey you to your destination. And right now, that Train is Crowdstrike holdings.
Crowdstrike Holdings Inc
With a high of $292 in November and a low of about $160 in March, Crowdstrike (NASDAQ: CRWD) still affords a good entry point for investors. Although it is above $200 at this moment, it is still far off from its highest points.
Crowdstike stands out this period because of the services it provides. For me, it won’t be out of place to classify Crowdstrike as a defence stock. It's only a little time left before wars would be fought on clouds rather than with physical military hardware. For management of threat, trust identity protection and log management, Crowdstrike is a good match.
With an over 61% increase in revenue in the month ending January 2022, Crowstrike proved that it is ready to compete in the cyber protection space. So what dip did you buy in 2022? Let us know in the comment section below.