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If It Feels This Bad Being Right I Would Rather Be Wrong

Hello, and welcome to our Market Alert video for today, which is April 12, 2024. I hope this video finds you healthy, wealthy and wise. We’re gonna dive into what happened this week, a lot of information. Of course, the market has gone down quite a bit, and we’ll explain that to you. We had job inflation numbers from the Fed came out. So we’ll go over that with you. But before I do, I want to talk about we had the Alzheimer’s Gala fundraiser last weekend. And I want to thank all the vendors all of you who contributed, it was a great success. My wife, Fay and I were co chairs last year. And we set a new record, we raised $525,000. That was very exciting. And we said we wanted to beat that. So this year, the goal was to beat it. And at last count, I think we’re pushing close to $700,000 raised. So that’s fantastic, a great success. And thank you to everybody that participated in that. It is a terrible, terrible disease, and we need to get rid of it as soon as possible. It’s horrible. And I’m sure it’s affected many of you watching this video, either directly or through family or friends. It’s a terrible thing. So our goal next year is a million dollars. So if you did not participate this year, we’re gonna encourage you next year to give and help the cause. Alright, so let’s talk about what happened this week. So the inflation numbers came in, and they were at the inflation rate went up to three and a half percent from the 3.2 that it was before. And so this was not very well received by the market to say the least. And so we’re going to go into that, but I’ve entitled this video, if it feels this bad being right, then I don’t, I’d rather be wrong. And so we said in prior video that we expected a correction here soon. And of course, a correction is a drop in the market of more than 10%. But less than 20%. Okay, because when it gets over 20%, it’s called a bear market. So they re they rename it after that it falls into a different category. So we anticipate that we could see a drop of a, you know, 10% or more. sometime this year, they’re common. On average, since 1950, we’ve had one a year, some years, we’ve had two some years, we’ve had zero, but it averages out to about one per year. Last year, you may recall, or maybe you don’t, we had one between July and October, where the market went down 12% Very attention getting very scary, unpleasant. Nobody likes these things. But they come and go. And we forget about them afterwards. Many of you may not even remember the one from last year. So why is this happening? Well, we got the inflation rate, and it came in higher, as I mentioned. And so what did that do? Well, there’s a lot of people that were investing based on the assumption that inflation was going to be at 2% by June or July of this year. Looks like that’s not going to happen. The assumption also was at the beginning of this year, many people thought the Fed was going to lower interest rates seven times starting in March. Well, now it’s the people are looking at September maybe maybe being the first time the Fed lowers interest rates. And maybe they only do it one or two times. So what we’re seeing here we think is a recalibration. In other words, people are recalculating what the future looks like based on the new data and not the old assumptions. And so that causes people to sell. Now, we always believe that you want to be looking at the fundamentals to determine where the future goes. And right now the fundamentals are and we believe the single most important fundamental is profits. You know, as we’ve said, we think that profits drives stock prices. And if profits are rising, stock prices should rise with them. So right now, the number one driver of profits is the consumer and the consumer right now represents 70% of our economy. And recent polls are showing that consumer confidence is in good shape they’re spending despite all these high prices, and if they are then profits should follow. So fundamentally, the economy looks to be okay. And that being the case profits should be also okay. And therefore, our the stock market should be okay as well. So if we continue to see some selling, which we anticipate could be the case, we view that as an opportunity to buy not as a reason to panic. Now, having said that, we always have our Invest and Protect strategy in place, in case it does turn out to be we’re heading into a recession. And yes, you know, the consumer is going to shut down, and all these other things that we’re worried about start to happen. Our strategy should get us out before we have any major damage. So we have at least I have the peace of mind on your behalf. I hope you do, too, that our Invest and Protect strategy is there to to mitigate that downside. So right now, our view is that we may be heading into a correction. And if that’s the case, it’ll be no fun at all. But we’ll get past it. And we should be okay. On the other side. On the bond side. This obviously is not good news for the bond portfolio. But we continue to believe that by the end of this year, the Fed will have lowered interest rates at least once. And once they start that cycle. Bonds do very, very well historically. And so therefore, we believe we should benefit from it greatly. We can’t time it. So we’re invested. Now, in anticipation of that. In the meantime, though, we’re getting a nice dividend, which is paying us well to wait for when the Fed doesn’t. So overall, we’re in good shape. No reason to be overly panicked, even though the market right now is behaving badly. So thank you for watching this video, please share it with your friends, your neighbors, your business associates, your family. We want to help as many people to have a successful retirement as we can. So all of you in SCWPer Nation out there, I hope you’re out there SCWPering your little tails off. I hope that life is good for you. And for those of you who are not retired and enjoying your second childhood without parental supervision yet, our noble purpose is to get you there. We want to create as many SCWPerS as we possibly can. So thanks again 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