MARKET UPDATE MARCH 2024

The equity markets continue to be strong in 2024.  The S&P 500 and the Nasdaq continue to post all-time highs.

Looking at the graph below, we see the strong steady move off the lows reached in October of 2022.  There were a couple of small reversals in early 2023 and a sharp reversal in October of 2023.  Since early November of last year, the S&P 500 and the Nasdaq (top two lines) have moved sharply higher. 

Let’s take a look at bond pricing going back to 2020.  The top or blue line below represents the price of intermediate term bonds and the orange line represents to price of long term bonds. Bond prices started falling in 2021 and fell off a cliff in mid 2022.

Unlike stocks, bonds have not rebounded in 2023 and 2024 because of the continued inflation and interest rate concerns.

I hope you have been paying attention to my ongoing recommendations to avoid bonds and anything other than large cap US index funds for your stock investments.  The previous two charts clearly show the cost of holding small cap stocks and bonds.  Target date fund investors and people who follow the asset allocation strategy that advisors pitch have gotten crushed over the last couple of years by following that bad investment strategy.

Recent inflation data has been mixed.  The market is still expecting multiple rate cuts from the Fed this year, but the inflation rate seems to have stalled out at around 3%.  Economic growth and employment data are still strong, but all eyes will be on inflation going forward.

Market Signals subscribers have all benefited by being fully invested in the S&P 500 since last November.  And you remain protected against any negative surprises going forward.   You can invest aggressively and fearlessly when you have protection against market downturns.

Stay disciplined my Friends,

Phil

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Investing in the financial products discussed in the Newsletter involves risk. Trading in such securities can result in immediate and substantial losses of the capital invested. Past performance is not necessarily indicative of future results. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, and market dynamics.