• We reached our Buy Signal on Friday and are buying back into the market today.
• Before going into all of that, we want to discuss the Moody’s downgrade.
• Moody’s is the latest and last out of the four major rating agencies to downgrade the US.
• However, it is not necessarily a market disruptor.
• It’s a consideration but it’s a short-lived bump in the road based on what’s happened.
• Relative to the rest of the world, we are still a safe investment, and we didn’t see a mass sell off of treasuries because of it.
• You might have noticed that we did not send out a Market Alert video on Friday.
• The reason was that because we hit our buy signal, we could not send communications until after we bought to avoid front running.
• Front running means someone could buy or sell ahead of us, which would also impact our optimum pricing.
• We bought back in today but the trades need time to settle before you can look online to see what the result was in 24-48 hours.
• When we sold, we had hit our sell signal, which is very reliable so we do not want to ever ignore it.
• We also had an inverted yield curve, which historically can indicate a big bad bear.
• With those indicators, the average sell-off historically is 30%, which is more than we want to experience so we took action.
• Now, the market has rebounded and we are buying back in.
• So, what did we miss out on?
• We only sold 50%, so our opportunity cost shrunk by 50%.
• Because the sell-off was really fast, and the recovery was also quick, our buy and sell points from the 200-day moving average have not moved much.
• For most of our clients, the opportunity cost was 2-4%, meaning if we had done nothing, they would have been 2-4% better than what we actually did.
• In our view, 2-4% for insurance against a potential 30% downside is worth it.
• Our Investment Principle is that growth is important but protection of principal is more important.
• We are also roughly 4% better off than if we had sold everything, like we had done in past cycles, so we are grateful for our sanity checks.
• So what happens next?
• We see four things that could happen after we buy.
• The first is that the market goes down from here and then goes back up again.
• If that happens, maybe we have a moment of anxiety, but then we don’t worry anymore.
• The second is the market goes up from here, goes back down again, but then recovers.
• The third is that it goes down from here and keeps going down.
• The fourth is that the market keeps going up. We love that one!
• If the market goes down from here, what could happen is the hard data might start to kick in from the tariffs and the market could go down.
• If the Fed jumps in with lower interest rates or Trump changes the landscape, the market could bounce right back up from there.
• It would be unsurprising to see the market go down first and bounce back from there.
• The worst-case scenario, if the market goes down and keeps going down, we will look at our strategy and our sanity checks and decide what kind of action we want to take.
• On the other hand, it is also possible that it goes up from here, keeps going, and we see new all-time highs.
• Consumers may be resilient. The market may have already priced tariffs in. We could see relief from the Fed. The market is waiting to see what will happen.
• The good news, though, is that we are buying back in, and we are optimistic.
• We think the future is more positive than negative.

Hello everyone, and welcome to a very special Market Alert video for today, which is May 19, 2025 and this video is to tell you that we have reached, we actually reached our buy signal on Friday. And so today, Monday is our buy day, so we’re buying today. And so wanted to go over that with you. And we also want to talk about, you know, how what happened during the time that we were out where we are now, and what we perceive could happen next. And so we got a lot to talk about. So thanks for watching. So I want to bring in Jordan Roach, our Chief Investment Officer, Jordan, good to see you. Before we get started, I want to talk a little bit about Joe Biden’s prostate cancer diagnosis. And you know, of course, we wish him and his family, you know, the best recovery. All you know, given the circumstances in my own personal life I experienced, you know, where my Gleason score was rising. And so I had a prostatectomy in 2021 in October. And so now, you know, basically I live quarter to quarter, right? So, because since then, every quarter, every three months I, you know, I have to go get a blood test to see what my PSA is doing. And, you know, fortunately, we got it when it was really early. But the key thing about that is, you know, Biden is a score of nine is basically a death sentence. You know, I know they’re saying that it might be, you know, testosterone intolerance, so they could, you know, address it that way. But still, a Gleason a score of nine is so advanced, it means almost a death sentence. He’s probably got less than three years to live based on just that. So catching it early. So if you’re over 50 and you’re watching this go, and if you know somebody’s over 50, make sure you are getting your PSA checked. It’s, it’s, you know, it’s the number one killer of men in the United States. So there’s that. So let’s talk about the Moody’s downgrade. I want to talk about that before we go into you know that we’re buying, etc, okay, we just got that big news, the US, you know, we’re no longer the highest rated with Moody’s out
of 20. There’s like 20 ratings, I think within Moody’s.
Is that right? We’re 19 now, 19 out of 20, out of 20. Which 20 is the best, right?
So instead of A plus plus. I think it’s A plus.
Okay, so what do you think about that, just in general?
Well, I mean, I think it’s probably been coming. Moody’s latest is the last one to the party of the four major, you know, rating agencies, so I think they’re just getting back on board. But in and of itself, it’s not necessarily a market disruptor. It’s a consideration. It’s something else the market has to consider. But given past times this has happened, which would be 2023 2020 11, the market did sell off each time, but each time was, you know, the first time was the newest was the only time it did it, you know, the first time. So now it’s the market kind of knows how to handle it. And I think it’s probably a short lived, uh, bump in the road,
yeah, it appears to be based, based on what’s happened. So, so you know, I want to share with you a story that happened in 2011 because this Moody’s downgrade reminds me a great deal of that. That was the first time that the US debt had ever been downgraded. So this was an absolute shock. Today we’re looking at Moody’s. This is the third time it’s happened, so it’s almost like but the first one was a real shocker. And I remember that this was 2011 I was at the movie theater with my wife, and actually was buying popcorn, and I got a text from one of the guys on our Investment Oversight Committee, and he said, Ken, did you see that the US debt was downgraded? And I remember, Whoa, my knees went weak. I actually kind of leaned against the the popcorn machine as I was thinking, oh my gosh, what are we going to do? And this was on a weekend. And so we called an emergency meeting the following night, which was Sunday night, and we were actually up until 11 or midnight, actually, and this was before zoom and all that other stuff. So we had to meet in person, and and we were very concerned about, you know, what are we going to do when the market opens? Because this is such short notice, and, you know, we’re always looking to protect you, our clients, from big losses. And we perceive this to be something that, you know, not only the bond market could see a sell off, but the stock market as well. So, you know, I guess one of the things that I took great strength from great solace in was that everybody was engaged. This is what we do. It was actually, you know, in a weird way, it was fun. You know, how what can we do to rally together and help our clients to get through this storm? So I guess I’m telling that story on one hand to give you a little history, but the other one to hopefully reassure you of how engaged our investment oversight committee is. We love what we do. We love you, and every time something like this happens, it’s important to us to protect you to the extent that we can. Don’t want to spend a lot of time on that because it’s, I don’t want to say it’s a ho hum moment. It’s deserved that we should. Right. Credit rating downgraded, but relative to the rest of the world, we’re still the safest thing. Don’t see a mass sell off of treasuries because of it, because where you’re going to put your money, otherwise, right? That’s right. So we covered that. So I want to go into you know, the the fact that we’re today or Monday is our buy day. So you probably noticed that we did not send out a market alert video on Friday. Many of you said, where is it? What happened? Well, the reason was that we did actually hit our buy signal on Friday, and today, Monday being our buy day, but we couldn’t tell you. And the reason why is because there’s this thing called front running, and if we tell you we reached our buy signal, and we’re going to be buying on Monday, what happens is that somebody could take that information, not you individually, because you can’t move the market by yourself, but the word could get out, and some institution, or somebody who can really move stuff could either buy or sell ahead of us, and if that happened, then we would not get you optimum pricing, because they would play against us. So we’re kind of in a conundrum from the standpoint of our core value is, you know, if you call us, we lost, and a lot of you did, where’s the video? But if we tell you we’re violating these front running rules, so kind of that was the rock and the hard place that we were. But to be clear, we did hit our buy signal on Friday, and today is our buy day, so we’re buying all through today. But the thing we want all clients to know is that they need to give a moment for the trades to settle before they can look online and see what the result was.
Because, right? I mean, the good news is the settling process, the trade process is faster than, let’s do past cycles, but we still need to give it time. The trades to be put in, they have to settle through, and usually within the next, you know, 24-48 hours, that’ll be, you know, online, they’ll be ready to go. Yeah?
So if everybody wants to go online this afternoon and look and see what happened, the trades won’t all have settled.
They won’t see those real time as they’re actually happening. Yeah?
So, ladies and gentlemen, just give it a minute, you know, let’s wait a couple of days, and then you’ll see what the actual result of what we bought for, etc. Okay, so just get that off the table, all right. So let’s go back in time, and let’s talk about, you know, why did we sell, right? And so obviously, the big thing is, we hit our sell signal, right? Technical said so, and our sell signal is very, very reliable, and therefore we do not want to ever ignore it. And there was so, there was that, but then it was also the yield curve. So tell us the history of when we have a big, bad bear, and pardon me, and you have our sell signal and the yield and the yield curve is inverted, right, which we’ve talked about in other videos, so I won’t go into what that means. But if the yield curve is inverted, and our signal says sell, and we get a big bad bear, what’s, what’s the history tell us?
it’s a stronger signal when all those things convert, typically, you know, that’s a, that’s a, let’s say, usually, a bigger sell off than had the yield curve not being inverted or something else. One of our other sanity checks is saying, Get out while our regular signal is so yield curve is a strong indicator paired with our current sell signals. Say, look bad things could be on the road if we go back all the way to the Great Depression, we look on average if we hit our sell signal and the yield curve is saying is inverted at the time of sell, the average sell off is about 30% 30%
that’s right. So you know, when we’re looking at a potential down of 30% because of that marriage between the yield curve and our sell signal and the coming bear market in the past, when they’ve happened, 30% is more than we want to experience. That’s right. So that’s why we have to take action. It’s context, all right. So then let’s talk about what that cost us. Okay, okay. So in other words, we we did that, the market rebounded, and we’re buying back in now. What did we miss out on? Because it feels like, you know, the market went up like 20% or something from the bottom, and we missed out on all of that. Oh my gosh, you know what’s going on here, but, but, but we didn’t miss out on all that. What? How much did we actually do you think miss out on?
Yeah, that’s exactly right. Because, you know, I get the sentiment we hear it, because usually we would have sold everything, and so if we sold everything, and now, you know, the opportunity cost is bigger than this time, because again, we only sold 50% right? So opportunity cost was shrunk by 50% but because the sell off was really fast, the recovery thus far pretty quick. Our buy and sell points, you know, the 200 day moving average, haven’t moved much. And so for most of our clients, and most of our clients are kind of 50 to 70% equities, their opportunity cost is somewhere between, you know, two to 4% usually right in the middle there, meaning, if we had done nothing, they would have been two, 3% better than what we actually did.
Okay? So it’s not catastrophic. You know, we haven’t missed out on 20% rally, it’s not what people think it is really that way, that’s right. The reality is, we sold here. We bought here. Yes, it did that in between. But so, okay, so you. The way I look at it, you know, the way I process it is, there was a potential of a 30% downside, and the insurance, if you will, the cost to us, what we missed out on, you know, two to 4% you know, growth is important, but protection of principles, even more important is the way I look at it. So it was, is a trade off. So all right, so let’s talk then about using the sanity checks, right? So we’ve improved. We have a we have a new way of looking at when we reach our sell signal. Now it’s time to sell. We use our sanity checks, and only one of them is flashing red, but that was a yield curve, the most important one. So therefore we sold half. How much better off are we because we sold half versus if we had sold 100%
again, we’re roughly again on average client models, kind of a balanced acquisition. We’re roughly 4% better than had we sold everything, like we had done in all past cycles. So if you look at you know, again, if we had sold everything, and the market does what it does, we’re about 4% behind from where we actually are right now, on average, with most of our clients. So it was a good decision, you know, obviously. So
we’re ahead by depending on the portfolio, but somewhere around three to 4% over where we would have been had we sold 100%
that’s right, and that’s means we basically recovered about 4% of those losses ahead of schedule. So
that’s meaningful, and so I guess you know, you can back test stuff all you want, but the proof is in the pudding, right? That’s right. This time around, it worked out. Okay, so, so the next thing I want to talk with you about then is what happens next? Okay, okay, so we’re buying, we’re buying, right? And basically there are four things that can happen. Okay? So the first one is the market goes down from here, and then it goes back up again. And we don’t worry about it anymore, but we have a moment of anxiety. The next thing that could happen is the market goes up from here, but then goes back down again, and it’s like, oh no, okay. But then it recovers from there. The other one is it goes down from here, and it keeps on going down, sure, that’s not the good one, sure. And then the other one is the market goes up from here, and then it keeps going up and it we don’t need to talk about that. That was fine, yeah, we love that one, so So let’s talk about, you know, it goes down from here, and then it goes back up again, consumer sentiment, all these surveys, that’s soft data. And then if it turns into where they start not buying stuff, you know, then that could turn into the hard data, right? That’s right. So that’s when it goes from soft to hard, yep. So the thing that could happen is that we have the hard data start to the reality of tariffs. Starts to kick in, market could go down, but we always had the Fed that could jump in with lower interest rates. Trump could change the landscape with regard to the tariffs. If that happens, it could bounce right back up from there. So it’s possible you can see a first down then an up after
that would not be unsurprising at all. I mean, if you know, with all the things are going on, and even in past cycles. Take our last 220 23 when we bought. Take even 2020 the first buy coming in, COVID. The market had a little bit of a retest, a recalibration, posted in an intermediate rally to get us to a buy
Yeah, we’ve been through a pretty remarkable rally. That’s right. So market’s going to, at some point, settle a little bit, yeah. So we were talking about this before the show, and what we said was that we think actually this, if the market goes down from here, it’s probably more people taking profits than it is the Moody’s downgrade.
I would think so if we’re looking at its early market behavior. I mean, you have some of the riskier the markets, you know, small caps, for instance, that are actually performing well today. Yeah, despite, so that’s a good sign.
Yeah. Okay, so that’s the market goes down and then goes up. So the other side of it is that it goes up and then comes back down again, but then finds its footing. And the reason why we’re talking about this is to set expectations. Because, you know, there’s sometimes, you know, we bought and we wanted to go straight up, and unfortunately, the market doesn’t do that.
Yep, and that’s 2023 so this is exactly I’m 2023 early 2023 early 2023 we bought everything was looking good, you know, a recession was avoided coming off 2022 and then all of a sudden, the market has to contend with kind of banking failures and a new variable. And then market rallied and eventually came back down. Got very close to a sell signal again, but it found its footing, you know. And then 2023 and 4 were good years.
Okay, so let’s talk about the worst case scenario. It goes down and it just keeps on going down. You have to sell again.
Could happen, you know, a couple things though, we have to deal with that. One, the market’s gonna have to get through a few technical, key technical levels to get there, and then we’re gonna, we’d come into our sell signal again. Because again, for the market to go down 30% means we get to a sell signal again, and we look at our sanity checks, we look at the state of affairs, and decide what kind of action we want to take. But we would be able to, if it does go down 30% we’re going to sidestep some of that, if not a lot of it.
If it does go if the market goes down 30% we’ll get to ourselves to cut through our cell signal to that. That’s a mathematic. Fact That’s right, and if it does, then we’ll go through the analysis with our four sanity checks, decide, do we sell 100% or not? That’s right. So that also and then, of course, the beautiful scenario would be that it goes up from here and it keeps on going, and for the rest of the year, we just see new all time highs.
That’s right. Consumers may be resilient. Maybe the market’s already priced in some of this. Yeah, maybe there’s tariff relief, fed relief, tax relief, you know, all these things, and the market’s waiting, yeah, they don’t know
You could make the argument that, you know, the big, beautiful bill gets passed, and there’s some real goodies in there, right? No tips, no tax on tips, social security, all kinds of stuff like that that could help the consumer that spends a lot of money, right? That lower income people. You could have the tariffs come to a head. You could have the Fed decide to lower interest rates. If those three things happen, it’s very plausible to say we could have new all time highs in the market. We absolutely could. That’s right, yeah. So right now we don’t know what’s going to happen. The good news, though, ladies and gentlemen, is that we are buying back in we are optimistic. We think the future is more positive than negative. The knight in shining armor is the Fed, and they’re sitting there right now, not doing anything. But if we start headed towards recession, we start seeing that, it would not surprise us to see the Fed lower interest rates dramatically. And so we do have that, and President Trump has shown that he’s flexible. He changes, you know, given what’s going on, so the tariffs could alleviate or maybe we resolve those. So it’s it’s likely that the future is good, but we have our strategy always there to help us, to protect us. So thank you for watching this video again. We couldn’t tell you that today was buy day, or that we reach our signal on Friday because of that front running issue. So if you can think of a way where we can tell you about it without telling you, let us know, because we haven’t figured that one out. But in the meantime, I hope this video found you healthy, wealthy and wise. Thanks for watching. And we’ll talk, oh and like and subscribe this, please. That would be great. And then, of course, 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