2022’s extreme market volatility continued through Christmas, as investors were in and out of stocks frequently depending on the latest comments from the Fed about interest rates – which has often been confusing and contrary. 

When investors are predominantly optimistic, it is easy to make good returns by being long stocks. When investors are predominantly bearish, it is also relatively easy to make good return being short stocks. This constant see-saw of sentiment seen throughout 2022, however, has presented the most challenging market conditions in which to earn decent returns, even for active traders like us. 

Whether we will see a “Santa Claus rally” in the final week, or more “Bah humbug!” and the worst year for passive buy-and-holders in decades remains to be seen. Either way, every investor is ready to say “good riddance” to 2022. We look forward to seeing some sort of sustained trends in 2023 – in either direction – and we will be on track for large profits once again. 

We will take advantage of this final week to sell many unproductive positions. Doing so, we will at least be making some lemonade out of lemons by using these capital losses to offset 2022 income and thus reduce our Federal income tax burden. If and when these stocks recover we will buy some of them again. In Level 1, this applies to APYX, DNOW, GDYN, JHX, LOOP, LWLG and RSI. 

Get your first month FREE when you subscribe

A full month of actionable insights on which stocks to invest.