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I Am So Confused

Hello, and welcome to our Market Alert video for today, which is October 20, 2023. And I hope this video finds you healthy, wealthy, and wise. We have a lot to talk about, so I want to dive into it. But before I get started, Sunday is my birthday. And you’re probably wondering, what do you get Ken, the man who has everything? Well, as I always say, if you want to get me something that I don’t have, it would be something little and red, that fits in my garage, a Ferrari would be great. So, if you’re so inclined, love to get that. Thank you. So, let’s talk about this week, it was kind of an interesting week and kind of plays into what we’ve been saying was going to happen, which is that we, the correction due to the realization that inflation and interest rates are still with us, would cause the market to go down some more. We said it would be a few more weeks before this all plays itself out. And it’s looking like it’ll be December, after the December meeting with the Fed that we might see perhaps a Santa Claus Rally. And so let me explain what I’m talking about. The Federal Reserve Chairman, Jerome Powell, on Thursday, had a meeting a press conference with the New York something something and he gave a speech, what’s very interesting is that they always release the transcript to the speech before he gives the speech. So when he did that, when they released the transcript, the market was up half a percent. It liked what it read, it was good, they went up. And as he gave the speech, it was it was up, it was up and down a little bit. But basically, it was up. Then came the interview afterwards. And this is where it really went crazy. The market went from positive to negative to positive to negative almost with every other word that Jerome Powell uttered in this in this interview that he had. And when it was all over, boy, howdy the the market did not like what he said. So and it went down. And we ended the day on Thursday down. And as I record this, the market is down today as well. So what’s going on? Well, basically, he said that interest rates will probably go up again in December, not in November, and that they’ll probably be around, there’ll be higher for longer than maybe people are expecting. So this is not good news for people who thought that interest rates are going to start going down. As we’ve been telling you all year, we thought that interest rates would – or rather inflation would bottom in June, at around 3%, which is what it did. And then we said they would trend back upwards and probably peak in December, we still stand by that. And it could be around 4%. It’s at 3.7 now. So we think that it’ll peak in December, and next year, we’ll start seeing inflation having a steady decline. But we still don’t see inflation down to the target that the Fed has of 2% next year, we think 3% is about as low as it’s gonna get again, but it’ll stay there, which is the good news. So that digesting what J Powell said, is what we think is going on right now. And why the correction that started in July, we think is not over, as we said that it would not be. However, once we get past the indigestion, and we settle into Yes, interest rates are going to be higher for longer. The threat of the Fed raising interest rates to the sky and causing a massive recession and everything falls apart and everything’s terrible, will start to dissipate. Because if they stabilize, then we can deal with that. And we think that that’ll bring the rally that we think will happen after that. So we continue to be bullish on stocks, even though right now it doesn’t look like anything good is happening in the stock market. I want to talk with you a little bit about our bond market, the bond market rather. And it continues to just get clobbered. In fact, yesterday after his speech, it really got took it on the chin. So we’re thankful that we continue to be out of bonds. And by the way, I mentioned this last week, but if you don’t know the enormity of this bond market bear market, it is the worst bear market since 1787, not 1987, 1787. And the fact that we have been out of bonds since April of last year is a tremendous thing. It was a very good decision. And had we continued to be in bonds, we would have seen significant losses that we have avoided. So we hope that you have the peace of mind at least on that side of the ledger of knowing that we’re in cash or in the money market fund. And we’re making in that currently a little over 5% and so that’s a good thing. And that’s what we do. So we hope you have the peace of mind of knowing that we’re watching over this for you, we hope you have the peace of mind of knowing that if we’re wrong, which is possible, and we do have a really bad recession, that everything falls apart the war in Israel and turns into or in Palestine turns into a you know, a World War where everybody in the region gets involved, the Chinese invade Taiwan, all the terrible things that could happen. If all of those things were to happen, we have our sell strategy to protect us against that. And so therefore, we should be able to mitigate and protect you as much as possible from all those terrible things. So we hope that that gives you the peace of mind. And hopefully, it reminds you of the value that we give to you by by having that strategy. So again, thank you for watching this video. I hope that you are if you’re a SCWPer, I hope you’re out there SCWPering and enjoying that second childhood. For those of you who are not, we’re gonna get you there by hook or by crook, we’ll make it happen. That’s our goal. And overall, we hope that everything is going well for you. Please share this video with your friends, your family, recommend others to us. We want to help as many people as possible to have the peace of mind hopefully that you have in these crazy times. So we appreciate you. We love you. We thank you. We are honored we are blessed that you trust us. And we look forward to earning that right every single day. So again, 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 MMWKM Advisors LLC (d/b/a Retirement Planners of America). ©Copyright 2023