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Are We There Yet?

Hello, and welcome to our Market Alert Video for today, which is April 19, 2024. And I hope you are wealthy, healthy and wise as this video reaches you. Glad you’re watching. Thank you. We have a lot to talk about, of course the market continues to go down. And where are we in that continuum? We did say there’s going to be a correction. And so that appears to be what’s happening. And should we be concerned about it? What about our bonds? What about the wars that are going on all over the place and the elections we got so much to worry about? So want to gives you some clarity and all of that, but before we go a step further, I gotta tell you, there’s been a seat change that just happened in our family. And, you know, I play tennis every Tuesday morning at 630. But I have, and I play for an hour and a half. I’m done at eight and I have a 930 appointment. So everything that morning is just by the second I’ve got it all timed out to take a shower, get changed, go, all of that. Well, I was on my way home from playing tennis. I arrived. And just as I arrived, I got a FaceTime. And it was from my daughter, and she said Daddy, Nathaniel, that’s my grandson wanted to FaceTime Papi. So I’m like, Alexa, oh my gosh, you’re melting my heart here, stop this! So he wanted to FaceTime me. So I FaceTimed with him for like a half hour. And next thing you know, my entire day is backed up, I’m late for all my appointments. It’s like, oh, my gosh, you sent me back. But it was worth it. And there’s the reason why it’s a seat change is because up until now, my wife, his grandmother was the center of the universe, but no, now he wanted to talk to me, ah, I play the long game. Anyway, let’s talk about what’s going on. Inflation numbers were not good. The growth of the economy is good. But that’s not good, because it means that inflation is going to be harder to beat. So what’s happening as we have chronicled for you here, maybe for almost a month now is that we anticipated that we would have a correction that we would see a drop in the market and in the bond market as well. And this is essentially a recalibration in our view. Okay, so what is that all about? So let me define our terms in case I’m using terms that are not familiar to you, first of all, a correction. So a correction is a drop in the market of more than 10%, but not 20. The reason why is because when it gets over 20, it now becomes a bear market. Okay. And that’s a different animal. Corrections are common. We had one last year, between July and October, the market went down 12% attention getting scary, no fun at all. But they come and go very quickly. And we average one every year since 1950s. That’s been the average. So we’re gonna have one this year, most likely, and we may be in it right now. So why do these things happen? Well, they’re recalibrations profit taking that kind of stuff. And there was a lot of optimism by investors. Of course, we didn’t agree with that, as we told you. But there was a lot of optimism with investors that the Federal Reserve was going to lower interest rates seven times this year, inflation would be down to 2% by July, and we’d have the massively soft landing and all would be well. Well, that’s not happening, what’s happening is that inflation is actually went up instead of down a little bit. But it went up to from 3.2 to three and a half the jobs markets is continued to stay strong. And if people have jobs, they spend money, they spend money, it’s inflationary. So it’s a bad thing. So you add all that together, and investors are saying, okay, the Fed now may not even lower rates this year may not even happen, in which case all of our optimism from before was overdone. So that recalibration is where people sell, but in on their backs, there are going to be many people who are going to say, You know what, thank you for dropping the prices, now’s the time to buy. And in corrections, those usually represent opportunities to buy not to panic and sell. So therefore, we’re not going to panic and sell because we view what we’re going through right now as the beginnings of a correction. So where are we? Like I said most corrections are between 10 or well all of them by definition are between 10 and 20%. Right now the market from its previous peak is down around five. So if this is a correction, we’re halfway there right now, and usually they last two or three months and then they pass recovery comes and everybody forgets about it. So this is a normal correction. And then maybe another month of this before it’s over, and then we start seeing it come back quickly. And by two months from now, three months from now, we should be back above where we were before the correction happened. So we need to be patient. And we need to look at the fundamentals, we’re gonna get a lot of corporate earnings reports here in the next few days. And our view is that those earnings reports are going to be positive companies are making profits. And as you know, we think that profits are what drives stock prices. And if profits are good, stock prices should be okay. And since they’re down because of the recalibration, they may rebound pretty quickly. So overall, we are in a period right now that is not pleasant. But our job is to hopefully hold your hand through it make you feel like it’s okay, we’re gonna get past this and it’s not the end of the world. Now having said all of that, we do have our sell strategy ready to be implemented. If it does turn into a big bad bear market you know, we will sell we will get out we will protect that’s our job. And as we always say, We want your money to last as long as you do and it’s not going to do that if you lose half of it in the next big bad bear. So we want to protect you from that if we can. So for those of you who are members of SCWPer Nation, I hope you’re out there enjoying your second childhood who are you’re not thinking about all this stuff. You’re actually out there playing golf, visiting your grandchildren, traveling, enjoying the summer. I hope that’s all coming true for you. And those of you who are not SCWPerS yet, we want to get you there that is our singular goal is to get you to a place where you can now go out and enjoy your that well deserved vacation for the rest of your life. So thank you for watching this video. Please share it with as many of your friends and family as you possibly can. We want to help as many people become SCWPerS. It’s our noble obligation. Okay, so thanks for watching and we’ll talk soon.

Please note: transcript has been modified after the time of recording. 

Economic indicators and stock market performance cannot be predicted. Opinions expressed regarding the economy and the stock market belong solely to Ken Moraif on behalf of Retirement Planners of America and may not accurately portray actual future performance of the economy or stock market outcomes. Opinions expressed in this video is intended to be for informational purposes only and is not intended to be used as investment advice for individuals who are not clients of Retirement Planners of America. All content provided is the opinion of Ken Moraif, CEO and Founder of RPOA Advisors, Inc. (d/b/a Retirement Planners of America ) (“Retirement Planners of America”, “RPOA”). ©Copyright 2023