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Payne Points of Wealth Podcast

The Santa Claus Rally Is Here Ep#144

By December 22, 2023No Comments

The Fed’s dovish pivot sparked a Santa Claus rally 

Money is pouring into the markets here at the end of the year and it shows once again you can’t time the market. Some investors are still sitting in cash waiting for the pullback to invest.

Sitting in a 5% money market is not avoiding risk

Not being invested means missing the opportunities:

  • A 20% move in small-cap stocks
  • A 20% move in real estate assets
  • A 10% move in municipal bonds

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Jay Powell wants to be Santa Claus, not the Grinch at the end of the year..

Ryan Payne

The Fed is already cooing dovish, instead of squawking hawkish.

Bob Payne

The obvious trade is the wrong trade

You want to buy what’s going up next, not what’s already hot.

In the 90s it was the new internet economy and dot com stocks. But those stocks did nothing for a decade. The Nasdaq went down 50% between 2000-2009. Meanwhile, small caps and emerging markets doubled in value. Today, cash at 5% and the Magnificent 7 are examples of the obvious trade to avoid.

With a broadly diversified portfolio, that could include some of the current hot trends, but not overweight in them, you’re preparing your portfolio for success.

Once you've talked about it at cocktail parties.. you've missed the boat.

Bob Payne

..the ESG play was a big was a big thing a couple of years ago... just invest in utility companies because they're always looking for alternative ways to produce power and save money.

Chris Payne

The Tipping Point

Pitfalls in your journey to financial independence

Pitfall one: Thinking generally about making money but not having a specific strategy

It's about a framework.. determining how much money you need to live on as opposed to how many assets you actually need.

Ryan Payne

Pitfall two: Not planning for taxes and inflation

..a man going into some kind of assisted care can cost anywhere from half a million to $1 million on average.

Chris Payne

Pitfall three: Not planning for healthcare costs

..it's so important to run the numbers. We're coming into the new year here, so it's a good time to reevaluate.

Ryan Payne

if you just do it willy nilly and just throw money at the wall, it doesn't necessarily work out.

Bob Payne

Hidden Facts of Finance

Ark Innovation Exchange-traded fund went from a 67% loss in 2022 to a 66% gain this year. Thanks in good part to its top holding Coinbase, Global shares of the crypto exchange nearly quadrupled as Bitcoin roared back to life. Despite these magnificent gains, the fund is still down an annualized 25% a year over the last three years. Or down almost 70% from its high.

Despite the popularity of activist investor funds in recent years. Activism hasn’t delivered strong results for its investors More broadly, in aggregate, activist hedge funds over the past three years have gained about 12%, compared with a 32% return for the S&P 500.

The holiday season accounts for nearly a fifth of U.S. annual retail sales and more for sellers of clothes, toys, and other private gift items. Holiday sales have increased in 19 of the past 20 years, 2008 being the only exception, and are forecasted to rise 3 to 4% this year to a record $960 billion.