Copy what your rich friends do to get richer.Think positively about growing your finances.Surrounding yourself with rich friends is a well-known strategy for making more money.īy spending time with rich friends, the theory goes, you will automatically: Which is why, despite everything, it’s best to stay mostly invested. It’s an unpredictable world, and investing is all about uncertainty.
On the other hand something dumb 1 could happen again and throw this all off course. Mortgage rates – much higher than I believe central bankers would prefer – should start to ease too. Higher rates from central banks still playing catch-up are baked-in, over there and over here.īut again, the top for rate expectations would be in if inflation is rolling over. Market interest rates moved far faster than official rates, as traders bet on the direction of travel. None of this means the interest rate rises are over – in the US or anywhere else. Markets – which look forward – could move more than you’d think in response. All this could unwind if the threat of ever-higher inflation has been defeated. The rapid pace of US rate rises also sent the dollar to lofty levels, dragging up rates around the world. That sets the tone for markets around the world. US rates lever the (un)attractiveness of US markets. But it is inflation and rates that have driven most of the de-rating in shares and the crushing of bonds this year.Īnd so if – and we still can’t be sure – US inflation really has turned, then we could have seen the bottom of this bear market. The proximate cause was yet another crypto crash (see the links below). Some of the car crash US growth shares already down 80%-90% this year found it in themselves to drop another 10% in a day earlier this week. The result has been a brutal 12 months for pretty much everything. Indeed rates have gone higher than almost anyone predicted this time last year, as market expectations have been repeatedly confounded. Regular readers will recall I’ve been expecting inflation to ease for months. Respective estimates from Dow Jones were for rises of 0.6% and 7.9%.Įxcluding volatile food and energy costs, so-called core CPI increased 0.3% for the month and 6.3% on an annual basis, compared with respective estimates of 0.5% and 6.5%. The index, a broad-based measure of goods and services costs, increased 0.4% for the month and 7.7% from a year ago, according to a Bureau of Labor Statistics release Thursday. economy, pressures could be starting to cool. The consumer price index rose less than expected in October, an indication that while inflation is still a threat to the U.S. Much bigger for markets than the US mid-term elections, which dominated the US media for fortnight. (Inadvisable, sadly, because the books about successful investors who have consistently got in and out of markets wholesale for a profit would be welcome on any ultra-minimalist’s bookcase.) Begone foul pestilenceĪnyway, the inflation news is a big deal. The optimal – but to be clear, hugely inadvisable – thing to do this year was to sit out the whole shebang out in cash. So I sometimes ponder how missing out on the best days might be worth it if you miss the worst days too. As a very active investor who watches the markets like most people follow their favourite football team, I feel the rollercoaster ride of a year like 2022 in my guts. But they happened in 16 hours of trading.Īdmittedly, I have a love/hate relationship with the old “don’t miss the best days” schtick. These look like somewhat mediocre returns for a whole year. You know that old adage about it being important to remain invested at all times – because if you miss a handful of days you will miss most of the return? All Rights Reserved.Last week the major US exchanges went bananas on a strong signal that US inflation might be turning. You should always understand that PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE Benzinga Pro. We do not recommend making hurried trading decisions.
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