2023 Stock Market Rally...
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That's why I said - different companies in different verticals. I can not recommend you to buy only tech or only utilities. Think and make your own plan. For example, 15% to Tech, 15% to Health, 10% to real estate, 15% to weapons and so on. Numbers must be not like in my example, they must be like you think. Also it is good idea to buy for some % of your funds just big index, like S&P500.
No more bad news??? Inflation at 6+% is good news? That fact the Powell is saying he will raise rates again is good news? That fact that QT continues is good news? If you know what you're doing you can trade this bear market rally for sure but IMHO the S&P at some point in the next 12 months is going much much lower.
I wouldn't have such high hopes, which is why I am mainly positioned in green energy / tobacco / defensive firms for now. I still think there is substantial tail risk from Russia and China escalation. If your first and foremost objective it to not lose money, I would not jump in yet. There is plenty of time to wait, and the Chinese balloon episode is definitely a form of escalation for me. And from a geopolitical point of view, there would not be a better time to stir up trouble by China than now.
In my opinion, the amount of gains you might miss are not worth the buy-the-dip opportunity more “war” escalation would mean. Also, if you hold the view that the war in Russia will keep going for at least some years, there are sizeable gains to be had on US defense firms which have bad ESG ratings (like tobacco) but something inside me tells me that once push comes to shove they will receive growing interest (and defense firms a re-evaluation in terms of how they are perceived morally by the Western population).
In my opinion, the amount of gains you might miss are not worth the buy-the-dip opportunity more “war” escalation would mean. Also, if you hold the view that the war in Russia will keep going for at least some years, there are sizeable gains to be had on US defense firms which have bad ESG ratings (like tobacco) but something inside me tells me that once push comes to shove they will receive growing interest (and defense firms a re-evaluation in terms of how they are perceived morally by the Western population).
My guess is the markets won't do particularly well on a general scale but there may be little bubbles here and there, such as what happened in 2018 with the weed bubble even when the markets feared a recession back then - you can see the SPY falling back then with rate hikes even as weed companies pumped like crazy.
As a result, it might make sense to move assets into positions where they are generally either relatively safe, like cash or into these high reward categories in which there may be bubbles resulting. By the way, the current "thing" is AI whereas in 2018 it was weed legalization. Who knows whether that will form a AI bubble though.
As a result, it might make sense to move assets into positions where they are generally either relatively safe, like cash or into these high reward categories in which there may be bubbles resulting. By the way, the current "thing" is AI whereas in 2018 it was weed legalization. Who knows whether that will form a AI bubble though.
Considering the terminal federal funds rate and having at least a mid-term view, it might be better to forget about (expensive) Western stock markets and instead focus on bonds.
Currently, Corporate High Yield and EM bonds seem to be the most attractive part of the bond market.
Currently, Corporate High Yield and EM bonds seem to be the most attractive part of the bond market.
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