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Year 2023 The Resilience Builder

Year 2023 The Resilience Builder


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“If past history was all that is needed to play the game of money, the richest people would be librarians.”
Warren Buffett

As we take a look back at 2023, both the grind down for 10 months and the “renewal” for some stocks in the last 4 to 8 weeks of the year, we are hopeful for a steady recovery for stocks across the board in 2024.

Had we been following a traditional Buy and Hold strategy, we would not have been happy for 10 or 11 of those months and perhaps not even now.

If the FED takes any action that the Market deems as not ‘positive’, such as, not cutting interest rates stocks could fall again.

Being an investor for the ‘long term’ does not necessarily mean watching a stock lose 1/2 to 2/3 of its value and sticking with it. For some people it does, though.

The last 2 weeks of December and even early January, many of the TV pundits reported that many investors were selling to take ‘some profits off the table’.

Even though many stocks popped back, it didn’t seem like there were many “profits” to brag about.

And where were the references to holding on ‘for the long term”?

What we learned as buy and hold investors in it for the long term, is that “it” means the Market and not necessarily an individual stock.

What actually is the ‘long term’?

How would you define ‘long term’?  I found the following answers to that question.

One year, Five years, Ten years, 20 years!  With this range of answers, I am surprised that I did not find an analyst who said 50 years!

So, what we have are an array of opinions as to how long the ‘long term’ is.

Our preference is to buy a stock or an ETF and hold it for as long as possible, that is, as long as it is trending.

We hope that will be for many years but we know that conditions change. There may be new technologies that change the investing landscape and other stocks we would prefer to own.

We do not want to risk that Market or Economic conditions can cause a major draw down in the price of an investment that we are holding.

We already went through that in 2000 and again in 2008.

It was a lesson painfully learned and, thankfully, led us to the Trend Following strategy.

Let’s take a different view

We approach investing from a Risk Management perspective.

We look for good companies whose stock is trending and whose outlook is positive.

We use the Trending Stocks Trade Risk Calculator to help us determine how many shares to buy to stay within our risk profile.

Then we use the Trailing Stop Loss calculation on the Today’s Results report for that stock to help lock in profits and manage downside risk.

We make these decisions in advance of buying the stock.

With the Stop Loss position in place, we don’t worry about any news or market volatility.

The decision when to a sell was already made when we bought the stock.

Is there ever a temptation to second guess our decisions? Sure.

Being human that inclination can happen but we now have a lot of practice in not giving in to those doubts!

What would you have done?

Let’s look at some names of recognizable stocks and ask the question – Would you have sold, and if so, at what point?

Here are 7 stocks well known to most people.

You will see the high price at beginning of January, 2023, the low price which occurred for most stocks in November, 2023 and where the price is as of January 5, 2024.

Moderna (MRNA) high $193.98; low $70.05, today $111.12; down 64%.

SunPower (SPWR) high $18.66; low $3.79; today $3.96; down 80%.

ChargePoint (CHPT) high $12.49; low $2.02; today $2.23; down 84%.

FMC Corp (FMC) high $132.22; low $51.24; today $60.78; down 61%.

Estee Lauder (EL) high $ 269.54, low $110.96; today $137.30; down 59%.

Dollar General (DG) high $ 248.56; low $103.67; today $135.76; down 59%.

Pfizer (PFE) high $50.92; low $26.63, today $29.47; down 48%.

These are some very dramatic price declines – in less than one year!

Different stocks. Different Sectors. Different Price Points. All going in the same direction.

Here are some questions to consider as you plan your investments in 2024:

Would you sell? If yes, at what point? If not, why not? In for the long run? How long is that?

Do you have a Risk Management strategy? If not, why not? If yes, do you implement it all the time?

Do you believe in ‘buying on the dip’?

There could be some good buys now and some good companies on the list. (We do NOT make stock recommendations.)

We believe in buying on the ‘uptrend’ because you never know when the dip has reached the bottom.

What did we learn from 2023?

A better question might be: what did we experience in 2023?

Bank failures – 5 banks failed beginning with Silicon Valley Bank;

Wars – Russia and Ukraine, Israel and Hamas at war;

The FED – multiple FED interest rate hikes; high inflation;

AND Border crisis; EV issues; China saber rattling, the growth of Artificial Intelligence, etc. etc.

We managed our way through all of these problems and perhaps built some resilience.

The stock market had problems but not all stocks were affected as we have seen with the Magnificent 7 (I remember the movie, it’s a good one. Nothing about stocks.)

So what does 2024 look like?

More of the same….and an Election Year.

Vote counting machines might be an investment worth looking in to…

And take deep breaths! Lots of deep breaths.

Breathe in the New Year…Breathe out the old.

I think I’ll plug my headset into my laptop and tune in to Radio Margaritaville.

A little music by J.B. always helps the breathing!

Always Remember: Ride Your Winners; Cut Your Losses!

Trending Stocks is an information platform only. Information provided on both the website, through the reports, The Trend and Trend Tidbits is meant to help users with their own analysis and strategies. Users are solely responsible for their investment decisions.

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