Wesley Nolte @Wesl3y: "𝗧𝗵𝗲 𝗦𝗸𝘆 𝗶𝘀 𝗙𝗮𝗹𝗹𝗶𝗻𝗴 (𝗢𝗿..."

United Kingdom

𝗧𝗵𝗲 𝗦𝗸𝘆 𝗶𝘀 𝗙𝗮𝗹𝗹𝗶𝗻𝗴 (𝗢𝗿 𝗶𝘀 𝗶𝘁?) The first real pullback in ages has investors on edge. Bitcoin being down over -28% isn’t helping either. So what’s going on? What do we need to focus on? And how do we manage what comes next? 𝙒𝙝𝙖𝙩’𝙨 𝙜𝙤𝙞𝙣𝙜 𝙤𝙣? ▸ The Fed played a large role when it dashed hopes of a definite rate cut in December. This has caused the market to reprice bonds, equities, and just about everything else ▸ I believe that large-scale investment houses also took Softbank’s sale of Nvidia stock as a canary in the coal mine and may have dialled their exposure back too ▸ Earnings season is over, and it was good for stocks. There may be some of the typical profit-taking at play ▸ Some of the biggest stocks in the market have very rich valuations, so investors are edgy ▸ US and Chinese consumer data doesn’t look great at the moment 𝙒𝙝𝙖𝙩 𝙙𝙤 𝙬𝙚 𝙣𝙚𝙚𝙙 𝙩𝙤 𝙛𝙤𝙘𝙪𝙨 𝙤𝙣? ▸ By far the most important data point in the market this week will be $NVDA’s earnings. If earnings are weak, hold onto your horses because we’re likely to see tech names fall further. If earnings are strong enough, we could see a rebound. NOTE: It is a sign of an unhealthy market when one stock has so much sway in the overall market direction ▸ Now that the US government is back in action, current and catch-up macro data (employment and inflation in particular) will have a big impact on the market. Especially in light of how they will affect Fed rate decisions. 𝙒𝙝𝙖𝙩’𝙨 𝙣𝙚𝙭𝙩? ▸ At the moment, this feels like the market taking a breather. Panic hasn’t settled in just yet. Nvidia’s earnings are incredibly important in shifting this tone. The Fed will also release its FOMC meeting minutes on Wednesday evening (UK time) ▸ A very large chunk of my portfolio is made up of low-volatility assets e.g. $EWU (iShares MSCI United Kingdom ETF) $BIL (SPDR Bloomberg 1-3 Month T-Bill ETF) $TLT (iShares 20+ Year Treasury Bond ETF ) — if the market takes a large leg down, I’ll cash these in and go shopping. Otherwise, they continue to provide decent yields at a low level of risk It’s also important to remember: the market has ups and downs. If you’re invested for the long term, you’ll have a lot more (and longer) ups than downs. So try not to panic.

3 Mentioned

EWU

iShares MSCI United Kingdom ETF

BIL

SPDR Bloomberg 1-3 Month T-Bill ETF

TLT

iShares 20+ Year Treasury Bond ETF

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