Momentum-Juul
Edited
๐—ช๐—ต๐—ฎ๐˜ ๐˜๐—ผ ๐—˜๐˜…๐—ฝ๐—ฒ๐—ฐ๐˜ ๐—ณ๐—ฟ๐—ผ๐—บ ๐˜๐—ต๐—ฒ ๐—ฆ๐˜๐—ผ๐—ฐ๐—ธ ๐— ๐—ฎ๐—ฟ๐—ธ๐—ฒ๐˜ ๐—ถ๐—ป ๐Ÿฎ๐Ÿฌ๐Ÿฎ๐Ÿฑ: ๐—–๐—ผ๐—ป๐˜๐—ถ๐—ป๐˜‚๐—ฒ๐—ฑ ๐—š๐—ฟ๐—ผ๐˜„๐˜๐—ต ๐—ฎ๐—ป๐—ฑ ๐—ž๐—ฒ๐˜† ๐——๐—ฟ๐—ถ๐˜ƒ๐—ฒ๐—ฟ๐˜€ The portfolio is up 3,45% in the first two weeks of 2025, significantly outperforming the S&P 500, which has faced challenges with major companies like NVIDIA and Apple struggling at the start of the year. The portfolioโ€™s strong beginning to the new year is driven by $INSW (International Seaways Inc) $COLL (Collegium Pharmaceutical Inc) $SANM (Sanmina Corp) $NTES (NetEase Inc.-ADR) , all of which are up more than 10% the first two weeks. We are witnessing a turnaround in the tanker market for International Seaways (INSW), where stock prices were excessively pushed down during the second half of 2024. Investment Bank Analyst Rating Updates bring positive upward momentum for these companies. During 2024, this portfolio gained 40,5%, significantly outperforming the S&P 500, which climbed 23,3%. This return was achieved without any exposure to cryptocurrency or gearing/leverage. The portfolio is exclusively composed of stocks and is well-diversified across different sectors, which has proven beneficial at the start of 2025. In the coming months, I will explore new opportunities and identify quality companies to add to the portfolio. With the stock market currently at an all-time high, the key question remains: ๐‘ช๐’‚๐’ ๐’•๐’‰๐’Š๐’” ๐’Ž๐’๐’Ž๐’†๐’๐’•๐’–๐’Ž ๐’ƒ๐’† ๐’”๐’–๐’”๐’•๐’‚๐’Š๐’๐’†๐’… ๐’•๐’‰๐’“๐’๐’–๐’ˆ๐’‰ ๐Ÿ๐ŸŽ๐Ÿ๐Ÿ“? Thatโ€™s the big question. Over the past few years, weโ€™ve seen the stock market withstand rising interest rates and high inflation. Despite a turbulent market, companies have managed to earn more money. I recently conducted a detailed macroeconomic analysis, and in summary, the trend shows that ๐’Ž๐’๐’”๐’• ๐’Š๐’๐’…๐’Š๐’„๐’‚๐’•๐’๐’“๐’” ๐’‚๐’๐’… ๐’Œ๐’†๐’š ๐’Ž๐’†๐’•๐’“๐’Š๐’„๐’” ๐’‰๐’‚๐’—๐’† ๐’๐’๐’• ๐’ƒ๐’†๐’†๐’ ๐’‚๐’” ๐’‡๐’‚๐’—๐’๐’“๐’‚๐’ƒ๐’๐’† ๐’Š๐’ ๐’”๐’†๐’—๐’†๐’“๐’‚๐’ ๐’š๐’†๐’‚๐’“๐’”. There are several factors that can explain why the stock markets have set new records despite a prolonged period of high interest rates, challenging inflation and a relatively difficult macroeconomic situation. ๐™ƒ๐™š๐™ง๐™š ๐™–๐™ง๐™š ๐™จ๐™š๐™ซ๐™š๐™ฃ ๐™ง๐™š๐™–๐™จ๐™ค๐™ฃ๐™จ ๐™ฉ๐™๐™–๐™ฉ ๐™ข๐™ž๐™œ๐™๐™ฉ ๐™จ๐™๐™š๐™™ ๐™ก๐™ž๐™œ๐™๐™ฉ ๐™ค๐™ฃ ๐™ฉ๐™๐™ž๐™จ: ๐—œ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ผ๐—ฟ๐˜€ ๐—น๐—ผ๐—ผ๐—ธ ๐—ฎ๐—ต๐—ฒ๐—ฎ๐—ฑ: The stock market is often driven by expectations of future economic growth. Although the current macroeconomic situation is marked by high interest rates and uncertainty, investors believe that central banks will begin/continue to lower the rates. This creates an expectation of lower rates in the future, which is positive for the stock market. ๐—ฆ๐—ฒ๐—ฐ๐˜๐—ผ๐—ฟ๐˜€ ๐—ฏ๐—ฒ๐—ป๐—ฒ๐—ณ๐—ถ๐˜๐—ถ๐—ป๐—ด ๐—ณ๐—ฟ๐—ผ๐—บ ๐˜๐—ต๐—ฒ ๐—บ๐—ฎ๐—ฐ๐—ฟ๐—ผ๐—ฒ๐—ฐ๐—ผ๐—ป๐—ผ๐—บ๐—ถ๐—ฐ ๐˜€๐—ถ๐˜๐˜‚๐—ฎ๐˜๐—ถ๐—ผ๐—ป: Many of the largest publicly traded companies, such as Apple, Microsoft, Alphabet (Google), and Nvidia, have delivered solid results and driven their stock prices to record highs. Their ability to generate revenue and grow despite high interest rates has had a significant impact on the markets. This also applies to companies involved in AI and green technologies, which are sectors with strong long-term growth potential ๐—˜๐˜…๐—ฝ๐—ฒ๐—ฐ๐˜๐—ฎ๐˜๐—ถ๐—ผ๐—ป๐˜€ ๐—ณ๐—ผ๐—ฟ ๐—ฐ๐—ฒ๐—ป๐˜๐—ฟ๐—ฎ๐—น ๐—ฏ๐—ฎ๐—ป๐—ธ๐˜€: For many years, investors have tended to rely on the idea that central banks (such as the Federal Reserve) will step in if the markets begin to fall significantly. This is often referred to as the 'Fed put', which is an unofficial expectation that central banks will take action to support the markets if they decline too much. ๐—ง๐—ต๐—ฒ ๐—บ๐—ฎ๐—ฐ๐—ฟ๐—ผ๐—ฒ๐—ฐ๐—ผ๐—ป๐—ผ๐—บ๐˜† ๐—ต๐—ฎ๐˜€ ๐—ฎ๐—ฑ๐—ท๐˜‚๐˜€๐˜๐—ฒ๐—ฑ: The labor market is strong, and economic growth has been better than expected. Companies have also been able to adjust to higher interest rates and have managed to maintain profitability. ๐—ข๐—ฝ๐˜๐—ถ๐—บ๐—ถ๐˜€๐—บ ๐—ฎ๐—บ๐—ผ๐—ป๐—ด ๐—ถ๐—ป๐˜ƒ๐—ฒ๐˜€๐˜๐—ผ๐—ฟ๐˜€: Many investors still believe that long-term economic growth will continue and that the current economic challenges are temporary. This optimism can lead them to invest in stocks despite macroeconomic difficulties. ๐—Ÿ๐—ฎ๐—ฟ๐—ด๐—ฒ ๐—ฎ๐—บ๐—ผ๐˜‚๐—ป๐˜๐˜€ ๐—ผ๐—ณ ๐—ฐ๐—ฎ๐—ฝ๐—ถ๐˜๐—ฎ๐—น ๐—ฎ๐˜ƒ๐—ฎ๐—ถ๐—น๐—ฎ๐—ฏ๐—น๐—ฒ: In many markets, there is still a significant amount of capital available for investment, both from private investors, pension funds, and other institutional players. ๐—™๐—ข๐— ๐—ข: When the stock markets start setting new records, it can trigger a self-reinforcing effect, where investors feel the need to invest in order to not miss out on opportunities. As more investors jump on the market wave, this can drive prices even higher for a long period of time. As stock prices rise, it strengthening the optimism. Based on this, I believe the risk of not being in the stock market right now is to big. That said, a major downturn often comes as a surprise. In such a market, I believe the key is to strive to limit risk. I think this can best be achieved by being invested in a well-diversified portfolio of quality companies. So, it will be interesting to see what 2025 will bring, and whether there will be other drivers beyond AI and cryptocurrency from 2024 that take hold of the market.
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