When the fourth quarter reporting period ended, the earnings growth rate finished up 4.3%. Despite the Fed raising rates eleven times between March 2022 and July of 2023, the economy defied predictions and continued to grow. One can argue that the economy would continue to grow, at a modest pace, even if the Fed kept their current level of 5.00% to 5.25% through the remainder of the year.
National Savings Month, is an opportune time to explore the strategy of diversification, a key principle for managing risk and enhancing long-term investment success. Diversification is a time-tested strategy that can help safeguard your investments and promote long-term financial stability.
This National Savings Month, let's explore the magic of compound interest - a powerful tool that can significantly boost your savings and investments over time. Harness the power of compound interest to amplify your savings and investments, helping you achieve your financial goals sooner.
Higher rates don't necessarily have to be bad for the stock market, especially if they are associated with stronger economic activity that is good for earnings prospects. Higher rates become more problematic for the stock market, though, when they become the basis for safety trades in an uncertain environment.
“Wealth isn’t primarily determined by investment performance, but by investor behavior.” - Nick Murray. A key takeaway from all of this is that market timing is a losing proposition. There is no “sell by” date or “end of game.” Short term hedges or bets seldom work. Instead, we find success by sticking to a plan as we incorporate new data into our decision-making process.
Simply put, inflation has proven to be more stubborn than the markets had forecast as recently as January. The job market, despite tech layoffs, is also remarkably resilient with unemployment rates hovering near historic lows at 3.4%.