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3 Social Media Stocks to Buy Into the Fed’s Rate-Hike Jitters

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Wall Street is having a crisis of sentiment much like a child goes through while learning to ride a bicycle. Investors know that the economy is healthy, yet they cannot trust themselves without the help of the Federal Reserve. As a result, the indices have had a correction in anticipation of a change in monetary policy. Today we muster up courage to share three social media stocks to buy on this dip.

The assumption is that this too shall pass and the bulls will remain in charge overall. The rally out of the pandemic was extremely fierce, so it’s normal to stall a bit. Healthy bullish markets need weak stints to gather momentum for more upside. Otherwise they would construct a house of cards that would crumble at the drop of a hat. The fact is that the economy is so healthy that the Fed feels the need to cool it down. Keep in mind that we still have an ongoing QE through March.

Following the Fed event, yesterday stocks flipped bearish after being green all day. The official statement was mild, however Mr. Powell spooked investors during his question-and-answer session. He went off script and unofficially pre-announced the hike for March. He did a similar thing with the announcement of the taper start last year. It is a bit annoying, to tell you the truth, because it causes short-term grief without cause.

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Nevertheless, the fact remains that we have a healthy economy, and it no longer needs help. The Fed can let go of the bicycle seat and stock shouldn’t crash. Equities may wobble a bit, but eventually the score cards will speak for themselves. Case in point Tesla (NASDAQ:TSLA) reports an increase in sales 65% over last year and 217% in earnings. The knee-jerk reaction to that was to sell the stock down to $880 after hours.

We now know that the Fed will end the taper, and most likely raise rates in March. This should not change the profit-and-loss statements of companies materially for years. Therefore, investors should expect to find stocks to buy on weakness. The best ones are companies who have strong tangible financials now. Ideally they would also have fallen into prior support zones.

Our three picks today fit the bill to a tee. I cannot guarantee that they won’t fall further if the indices continue to correct. However left alone, taking bullish positions in them sounds reasonable enough. Since we do have extrinsic factors, investors should be patient by taking only partial positions to start. This is not the time to add to current risk but it is OK to start new positions.