We hope this post finds you well. This year is flying by, isn’t it? We hope you have summer vacations planned and are taking advantage of some rest and relaxation this season.
The major markets have been up in 2023 about 2% for the Dow, 13% for the S&P 500, which is technically in a bull market now up over 20% from the last low in October, and 28% for the Nasdaq. But does it feel right? Is this really a bull market, or a fools market? Inflation is still high: more than double the Fed’s target inflation of 2%. The markets have been hopeful and pricing in Fed rate cuts by year end but the Federal Reserve just hinted at their most recent meeting that they anticipate two rate increases before thinking about rate decreases. We don’t believe we’re out of the woods yet, but the markets don’t seem to give a darn. So, do you have FOMO (fear of missing out) and chase return and these high flying tech stocks or do you stay the course with a diversified portfolio? The higher this rally goes, the bigger the potential drop; it could very well be a huge rally before a big collapse.
Artificial intelligence has a lot to do with the rally. If you consider the S&P 500’s growth this year, most of the growth has been from the FAANG stocks and a few others. Facebook, Apple, Amazon, Netflix, Google and some others like Tesla and Nvidia. If you take these 8-10 companies out of the S&P 500’s growth for this year, the total return from the other 492 companies or so equates to less than 1% of the year to date return. That’s definitely something to stop and think about.
So what are we doing to not only protect our clients’ life savings but also grow it in such a weird market environment like the one we’re in? We implement various strategies to implement protection and growth. Fully principal protected and guaranteed strategies, 6 month treasuries, structured notes which can allow someone to make money when the markets are up and down, within limits. Tactically managed ETF portfolios and stock portfolios focused on dividends. You want a little bit of it all and shouldn’t rely on one strategy or portfolio type to weather this kind of market.
OFFER: Complimentary Portfolio X-RAY. This investment analysis will provide you with all the detail of your investments. Potential return, potential downside, costs, dividends, risk, and how your portfolio would hold up in another 2008 environment. Call our office at (571) 577-9968 or email firstname.lastname@example.org to see if you qualify to meet with our advisory team.
As always, any and all questions are welcome. We are here for you.
|All our best,|
Abe Abich & the Abich Financial Team