There have been good times and bad times, thrills and spills with my investors over the years. They all agree that the markets are not all that bad and that they have been growing wealthier over the years. I deal with people who appreciate what me and my team do for them. It is hard for me to work with some people who are going to do what they are going to do. Frequently, they do the opposite of what I tell them to do, so it is a waste of time.
“Do not panic and stay the course” is sound advice as long as it is backed up with evidence and data. I do not buy, hold and pray for miracles looking at the capital shifting higher and lower right before my eyes.
With millions of dollars at risk, staying calm (with the help of meditation) in volatile markets is essential for making informed, rational decisions, maintaining avoiding unnecessary losses, and taking advantage of opportunities that may arise during market downturns.
Being a rock for others financially does not mean I have to be infallible or without my challenges. It is about providing support, stability, and strength to my clients during both good and bad days.
Moving on, things are looking good these days. Wall Street has been intensely obsessed with the Fed, and we can safely declare that Powell has finally pivoted as expected. The FOMC left rates unchanged on December 13, which was no surprise to anyone paying attention. More importantly, the Fed reduced its expectations for inflation and interest rates in 2024.
That is not fair! Powell’s press conference was dovish at every turn. The Fed critics and bears are “shocked”. Whether the bid for risk assets has the side effect of triggering inflation through the wealth effect channel remains to be seen.
The pessimism that plagued the markets just a couple of weeks ago has flipped to excitement, if not euphoria. Both institutional and retail investors were widely bearish at the start of the year and they have missed the rally to a large degree. With USD6 trillion in total money fund AUM, that is a lot of dry powder for a melt-up on risk assets in the coming months. Some people are going to be looking for some places to park their funds for higher returns.
Bears could still be right as there could be a crash anytime. After all, 2023 is not over yet. Our technology exposure of 30 stocks (a portfolio for those who are fit medically with lower blood pressure) which suffered a huge drawdown of more than 50% last year has bounced back strongly and is sitting on a profit now. It has doubled on a 5-year basis covering the bull and bear markets – not bad at all. I’m not a blind optimist and you get the idea.
