What a difference a year makes.
In July 2022, I stared at my apple trees in disappointment.
My dogs, Buttercup and Lily, joined me as I watched a lone, withered piece of fruit give up on its will to live. It let go and dropped to the ground with a sad, hollow thud.
The branches were bare, and I feared the trees were sick.
Today, those same branches are heavy with fruit.
I’ve stopped looking up recipes for cobblers, pies, and tarts, and started wondering, “Should I be learning how to make cider?”
It’s not just apples either. The raspberry bushes are healthy, producing fruit. There’s now a constant race between me, the birds, and the deer to see who harvests them first.
But the bounty isn’t only found here on our small farm.
In the markets, the first half harvest of gains was the best in decades. And there, investors don’t have to battle birds and deer for the choicest of wins… only themselves and the advice they heed.
The Calamity That Never Was
“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has ever been lost in corrections themselves.” – Peter Lynch
That is one of my favorite quotes in investing, because I believe truer words have never been spoken.
But doomsday scenarios are addictive. Particularly, after years like we had in 2022.
There’s an undeniable trend that haunts investors time and time again.
Following collapses, they end up constantly looking over their shoulders for the next villain that’ll rob their retirement. And guided by that fear, too many hamstring their financial futures believing the worst is yet to come… even though it never does.
Now, this year hasn’t been without its fair share of negative news.
The S&P 500 has reported a decline in earnings every quarter since the fourth quarter of 2022...
We’ve had a regional bank crisis…
The Federal Reserve is still raising rates… for now…
And there’s been the constant drumbeat that a “recession” is coming for the U.S. for more than a year (though, I have doubts it’ll ever arrive) …
Yet, through the first six months of 2023, the Nasdaq sprinted 31.7% higher.
It was the best first half for the index since 1983.
Driven by the enthusiasm and potential for artificial intelligence (AI), tech stocks have continued their march upward, setting new 52-week highs.
But we’re still more than 11% below those all-time highs posted in November 2021.
Now, despite initial skepticism toward the most ambitious of AI movers, I’ve been bullish on the Nasdaq this year. I’ve even called for investors to double-down on the “dogs” of 2022, like Tesla (TSLA) and Meta Platforms (META), while slashing their exposure to oil & gas to save their portfolios.
I haven’t feared a market crash.
That’s the knowledge and confidence two decades of trend trading has imparted on me.
I didn’t go to a fancy school… I don’t have a fancy degree… I don’t tout a Rolodex full of important names and academic heavyweights…
I simply have real world experience.
That type of experience seems forgotten on Wall Street, replaced by the all-encompassing need to predict the next doomsday that’s coming. The one that’s on the horizon… maybe not today… maybe not tomorrow… but soon!
The reality is many bears had their honeypots smashed in the first six months of 2023.
Portfolios and track records have been decimated trying to time a correction.
And we now get into a dangerous situation where those who called for a calamity that never materialized dig their heels in.
As we head into the back nine of 2023, Wall Street strategists are more divided than ever before on future of the markets…
But should you even bother listening?
Well, I throw my hat in the ring in tomorrow’s Part 2. So, stay tuned…
On the edge of my seat,
Matthew
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© 2023 Matthew Carr
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This market commentary is opinion and for entertainment purposes only. The views and insights shared by the author are based on his many years of experience covering the markets. But they are subject to change without notice and opinions may become outdated. And there is no obligation by the author to update any information if these opinions become outdated. The information provided is obtained from sources believed to be reliable. But the author cannot guarantee its accuracy. Nothing in this email should be considered personalized investment advice. Investments should be made after consulting your financial advisor and after reviewing the financial statements of the company or companies in question.
Great advice as usual! Thank you!