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What Could Happen Next?

Hello, and welcome to our Market Alert video for today, which is October 13, 2023, Friday the 13th. And, you know, as we said, in our video we sent out earlier this week, it’s just very difficult to talk about trivial stuff like investments and inflation and the Federal Reserve when you have the tragic and savage events that are happening over in Israel, it’s just, it’s beyond belief that in today’s world, you think we are beyond that kind of behavior and those kinds of horrible acts. But apparently, we’re not. So thanks for watching. Wanted to kind of give you an update, the conversation is a continuation of what we said earlier this week, and that is that the market is going to be looking at profits, not human misery. And if profits are going to be good, the market will probably go up. So and that’s why we saw this week, even when terrible things were happening, the market had some pretty good updates. And so that’s a reflection of that. We continue to think that before now and the year end, we’ll have a rally in stocks, stock market tends to look six months into the future. And if I were to ask you six months from now, do you think the Fed will be done raising interest rates? The consensus I would say right now is that yes, they will be done by six months from now. And what would happen if they were well, chances are the market would go up, and the investors tend to look ahead and six months. And so if, in the next six months, the Fed will have stopped raising interest rates. And there’s the potential for a big rise in the market because of that investors, we think will start buying this year, six months ahead of that. So from the stock market standpoint, we think that we still have a rally ahead of us. In bonds, as we said, we don’t think that that’s going to be a good thing. Feds probably going to raise interest rates one more time this year. And as you know, bonds tend to suffer when that happens. I showed you the chart last week, because how much bonds have suffered. I want to share with you another chart, just to put it in perspective. In fact, you know, I read an article, before I do that I read an article in Bloomberg that talked about how this is the worst bond market since 1787. And when I saw that headline, I thought, Man, the editor must have missed on that, because maybe you know, they meant 1987. You know, maybe that’s a typo. But no, I read the article, and it said, you know, that’s how far back the records go to show that this is the worst since 1787. And maybe it goes beyond that. But records weren’t available before that. So this might be the worst bond period, ever. And it’s because the Fed has raised interest rates so fast and in such a short period of time. So thankfully, we are out of bonds have been so since April of 22. And will continue to be. Our money market fund is gonna pay us over 5%. So that’s a good thing. While we’re waiting. So we’re going to continue to do that. So I want to share with you that chart, just to show you something that I thought was very interesting. This is Yahoo Finance. And this is the the blue line that you see here. This is the or the darker blue line, should I say that’s the S&P 500 index over the last two years. And it is down about a little over half of a percent over the last two years. Now the baby blue line, this one down here. This is the fidelity Balanced Fund, which is I’m using as a proxy for the 60 stock 40 bond portfolio. And what you can see is that it is down almost 20%. So what’s the difference between these two, that’s a massive difference. And as we look at it, the primary culprit is the bond market. It’s the bond component that has gone down so dramatically, that is dragged down even as a portfolio that is, you know, essentially a 6040 portfolio. So the old notion that you buy a 6040, you let it go, and you’d never touch it again, other than rebalancing and you take 4% out, we think that world is gone. The importance of having a human overlay that looks at it and says, You know what, that component of our portfolio, we don’t need to have, and we should be out of it, we think is very, very important. The other thing that’s very important, we think, is to have our sell strategy as well, to address the stock side of the picture, because that’s where in most cases we could get hurt the most in a Big Bad bear market like 2008, for example. So we hope that that having our sales strategy and having our investment committee looking over your finances, gives you the peace of mind and lets you go out and enjoy life and not worry worry about all this boring financial stuff. And most importantly, for those of you who are retired lets you be a SCWPer. So thanks for watching this video, we are eternally grateful that you’ve given us the opportunity, the privilege, the honor of being your retirement planner. We intend every day work as hard as we can to deserve the trust you’ve placed in us. And our goal is for your money to last as long as you do and we’ll do anything we can to make sure that happens. So thank you for watching this video. Share it with as many of your friends and family as you possibly can. And by the way, recommend us to your friends and family as well. We want to help them if we can, we’ll do right by them, you know that and whatever happens we’ll part friends and we’ll treat them we’ll treat him with respect and love. Okay, so thank you for watching this video 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