All year we’ve been in the camp that the Federal Reserve is unlikely to cut rates, and we have positioned our portfolios accordingly – overweighting cash over longer-term bonds.
The good news is that things have played out as we expected. As of October, the Fed’s preferred inflation measure, the personal consumption expenditure index (PCE) is up just 3% since last year – that’s the lowest reading since March 2021. The big decline in inflation initially came from falling energy prices.
At the end of 2022, Wall Street strategists made their 2023 predictions.
They expected stocks to fall this year.
Instead, the S&P 500 surged almost 20% and is now within range of minting new all-time highs.
Although the S&P is up big this year, it hasn’t even recovered all its losses from 2022 yet: A breakout to new highs would be extremely bullish. I think it’ll happen soon.
We can’t control the direction of the market. But we can control the types of companies we own. Its time to start the rally, I invest in companies with strong balance sheets with upcoming catalysts…
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