In my latest article for The Motley Fool, I discuss a theory I have had for a while, the idea that certain growth stocks trade in tandem with one another. This was never made more clear to me than in 2011, when Netflix (NFLX), Chipotle Mexican Grill (CMG), Monster Beverage (MNST) and Green Mountain Coffee Roasters (GMCR) all rose incredibly alongside one another. However, in the coming years, each stock proceeded to tumble more than 40%, some much more than that!
The pattern was unmistakable and it will happen again, maybe not to these stocks but certainly to others. Accordingly, investors should always monitor stocks that trade as a group because they can often serve as early warning signs of trouble ahead. Click here to read why the the four stocks fell and why they are rising once again!