2020 just won’t stop, you guys. With only a couple of weeks left in the year, we’ve got another stock market shake-up as the announcement of the S&P 500 adding Tesla arrived. In this week’s “Buy It and Burn It” segment, we’re going to talk about what this addition means for you.
With DoorDash Inc. (NYSE: DASH) and AirBnB Inc. (Nasdaq: ABNB) being old news, and being recently called “the most ridiculous IPO of 2020,” I thought we were in for a quiet rest of the year…
Apparently not.
Tesla Inc. (Nasdaq: TSLA) has been the king of electric vehicles (EV) since its founding in 2003. The stock never stopped soaring. The day before the news of the S&P 500 adding Tesla, the company set all-time highs.
The reason this is such a big headline is because of how the S&P 500 chose to go about it. Tesla is currently valued at $600 billion, making it the largest addition to the S&P 500… ever. And they did it all at once.
Now, there is a historical precedent set for when huge companies are added all at once… so what does that mean for you?
The S&P 500 Adding Tesla Could Lead to a Trading Surge
Tesla is too big of a company to just settle down into the index like nothing happened. The S&P 500 is going to have to rebalance and make room for the new addition.
So what’s on the chopping block? That’s where the opportunity comes in.
Funds involved in the S&P 500 are going to have to unload billions of dollars worth of shares to account for Tesla. For traders like you guys, this could mean a chance for big profits.
But there’s one stock in particular that I’ve got my eye on.
Check out my video below to see what the stock is and my take on the S&P 500 adding Tesla in this week’s segment of “Buy It and Burn It.”
