Just some thoughts to share about the market (5/8/2021),
To rewind what happened on Friday Big Jobs Day, Goldman and other Wall Street big names were all expecting somewhere north of 950,000 new hires (to even more than a million) but only less than 300,000 were added—Biggest MISS in history.
In Covid terms, this is an UNPRECEDENTED gigantic miss. Nonetheless, the market has rallied in hopes of further Fed accommodation.
The DOW and SP500 hit new all-time high. In review, this would mean that the indices have hit NEW all-time highs in January, February, March, April, and May of this year. Just let that sink in for a second.
As I have shared a few weeks back, hedge funds have slowly exited some of their long positions in the market but retail investors (like us) have kept buying. Yes. Aside from the Archegos $50-$100 billion blow up, people keep buying with their stimis and have actually move more of their savings into stocks. There’s close to absence of fear in this market.
At this point of my short 11 years stock investing career, there’s no questioning investors should not go against the Fed and go short from here and eventually be steam rolled by every rate hike decision BUT more cautious investing is DEFINITELY warranted. If you CANNOT stomach a 50% drop in the market from here, and buy more, review your stock investments again unless of course you own index ETFs/funds (less downside, but less upside as well).
As most of the group members would already know, I am still a NON-BELIEVER of cryptocrap. I can confidently say I won’t be consider investing in this new gig in the next six months. Kudos to @XXX for ringing some sense into the crazy crypto world but I guess I would remain steadfast in keeping my money only in both stocks and real estate.
Circling back, unemployment bonuses of $300/week and stimi checks have fueled this excess confidence and demand everywhere in the market. a chicken wing sold for a pound a year ago for $1.05 is now being sold for $2.04. SURE. Inflation is transitory per the Wall Street God JPOW but this will surely end up badly to those on the bottom when benefits and free money stop flowin—Only when the tide goes out do you discover who’s been swimming naked—it also goes the same for the never ending rise in speculative cryptocurrencies.
As for my portfolio, it has remained the same albeit the fluctuations in value of some companies have risen and fallen but overall it has stayed the same.
Some have reached out because of me not updating the group. It more probably is because there hasn’t been a big change except for the big miss in jobs report by this ‘amazing’ administration. Whether we will see the last hurrah of the market or still witness new all-time highs in June, July, August to December of 2021, remains up in the air.
Good luck to everyone in this group.