We never ever ever EVER make investment decisions by gazing into a crystal ball. EVER!
No one can predict the future and since the market goes up MOST of the time, then betting on when it will go down is a loser’s game.
I’m sure you know that by now.
THAT SAID…
During a meeting this week, one of our members said, “Look, I totally get that short-term predictions will never impact our investment decisions. #alwaysbeinvested!
That said, having some expectations would help keep me cool if things don’t get better soon. So where do you see the market going?”
So after reasserting that this is just “bar talk” and 100% non-actionable, I explained…
WE PROBABLY HAVE MORE TO GO
Here are a few why’s in no particular order…
– We broke a significant trading floor on the S&P 500 last week.
– The Fed signaled that even if the labor market contracts, more rate increases are on the way until inflation is tamed.
– Rate increases also raise bond yields. Lots of people (and funds) that were invested in big dividend stocks are now selling and buying treasuries. A guaranteed 4% from the US government is better than a 4% promise from IBM.
– Big Tech which led the market out of COVID got WAY overvalued. Even Big Tech will revert to the mean, so they (and the market) will underperform to get back to even.
– September and October are historically the worst months of the year. One down. One to go.
BEFORE YOU JUMP
– We know years like this happen, so we plan for it. If you’re invested correctly, no matter how much paper losses you’ve incurred, it’s only temporary. The only thing that can make them permanent is selling.
– If we go into a recession, it’ll probably be one of the lighter varieties.
– If the Fed decides it’s turned the screws enough, the market will rejoice and rebound pretty quickly.
– The market always rebounds BEFORE the economy does. That’s why it’s called a leading indicator. It’ll rebound before you can realize it has.
– November/December are usually two of the best months every year.
ONE MORE TIME
DO NOT GET OUT OF THE MARKET TO “WAIT IT OUT”!!!!
I went out on a ledge here, so please don’t make me regret it.
Staying invested – or better yet – investing MORE will likely reward you handsomely in the future.
We just don’t know WHEN which is why Warren Buffet describes smart investing as “simple, but not easy.”
#alwaysbeinvested
