MoricPortfolio @MoricPortfolio: "Hey there, here is the..."

Hungary

Hey there, here is the usual monthly update regarding the markets and the portfolio. While August was a mixed month with both positive and negative developments, the outlook for September hinges largely on the tech sector's resilience, inflation, job reports data, and the consequent FED actions. Now let's check some points closer: 𝟏/𝐌𝐚𝐫𝐤𝐞𝐭 𝐮𝐩𝐝𝐚𝐭𝐞 August started off with weaker-than-expected job data spooking investors about a recession possibility. This overgrowing pessimism hit tech stocks the hardest due to their economic cycle sensitivity. Furthermore, the possibility of higher interest rates from the reaction of the FED fueled uncertainty. High interest rates tend to be negative for tech stocks because they increase the cost of borrowing and make future earnings less valuable in present terms. This added to the selling pressure in the tech sector. Moreover, due to the significant rally the sector experienced, some investors also took profits fearing that they might lose a significant part of their profits it things turned out for the worse. I consider this a market correction that was necessary to keep investors more realistic and limit the euphoria in the markets. It is important to keep a long-term view during these periods and focus on a carefully developed strategy. Truthfully, many investors panic in such situations but if you truly believe that you have a good system in place you stick to it in these periods as well. That can give reassurance to navigate through turbulent times and ultimately reach your financial goals. By the end of the month, markets seem to have recovered. The S&P 500 ( $SPX500 $VOO $SPY ) closed the month with a ~2.28% gain while the Nasdaq 100 ( $NSDQ100 $QQQ ) with a ~1.10% gain. 𝟐/𝐏𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 The portfolio returned around 1.65% during the month outperforming the benchmark Nasdaq 100 index. I took advantage of the drop in tech stocks at the beginning of August and increased the exposure in $TQQQ $SOXL $FNGU and $SPXL . Furthermore, our hedge $TMF position saw positive momentum due to the worrying economic outlook. Now around 14% of the portfolio sits in leveraged instruments which I expect to benefit from in the upcoming period. 𝟑/𝐎𝐮𝐭𝐥𝐨𝐨𝐤 𝐟𝐨𝐫 𝐭𝐡𝐞 𝐮𝐩𝐜𝐨𝐦𝐢𝐧𝐠 𝐩𝐞𝐫𝐢𝐨𝐝 The market seemed to return to a fairly priced territory according to the Morningstar Fair Value index. Furthermore, investor sentiment has been steadily rising since the beginning of the month correction so I am positive about the next month. I expect tech stocks to benefit the most from this positivity therefore I expect outperformance thanks to our leveraged positions. However, in this more fragile period, the FED's next moves will be crucial so I keep a strict eye out on economic data such as inflation and unemployment numbers. If inflation remains sticky, more rate hikes could be on the horizon, potentially dampening market enthusiasm and hurting the leveraged positions. In that case, I might reduce exposure. However, as a general rule, I would like to leverage further during market drops such as this at the beginning of the month. In the long run, I strongly believe that the tech sector, especially with this instance pace of innovation and the more and more tangible benefits of e.g., AI, it is super beneficial to stick to the sector if you have the stomach for a more volatile portfolio. In the long run, you will benefit multiple times. So stick with me on my investing journey. Remember, I invest the majority of my money with this portfolio as well so I literally manage your money as mine. If you are interested in investing with me, check out my bio and strategy description linked to the pinned post on my profile. This is it for now. Have a nice weekend! Best, Moric (Morris)