What a November. This year it is a Turkey rally.
November was the best for equities since before the pandemic.
It was not all stocks as Bitcoin and gold climbed.
I thought we would have an end of year rally, but it came a month early.
The question now is whether we can hang onto these gains.
The S&P 500 stock-index moved above 4500 to near 4600 and Bitcoin climbed above $42,000.
This is really the jolly season.
Not sure we can maintain this, but 2023 will be a good year for your retirement account.
It goes without saying that the Magnificent 7 lead the pack north with Nvidia in the lead.
It appears that everyone is focused on the Federal Reserve lowering rates next year, possibly by March.
This is based on the slowing rise of inflation.
There is also the thought that the Fed will have to lower rates to keep the economy going, as it will slow in 2024.
I don’t see the logic in lowering rates. I think this economy will do fine at current levels.
There is a generation of analysts who know nothing but zero-interest rates and have no concept of how to deal with rates at all.
The levels we are at right now with the Fed funds rate just above 5% is far from high.
What I feel you will see at the end of the year are people taking profits.
I think the euphoria will overcome such selling and won’t tank the market.
I would suggest that taking some off the table is justified.
I'm not suggesting to sell out, but you never actually have that gain until you take it.
Look at some of your best and take a percentage and should you have any laggards, get rid of them today.
The losses can be applied to the gains to mitigate taxes.
I am not sure you will have many losses in this kind of market.
Another thought is to take profits in those that have gained but lag the market.
If those stocks can’t perform in this type of market, they won’t do better later.
All is not perfect as in every case.
We have a ridiculous amount of federal debt and Congress has not stomach to deal with such in an election year.
I would suggest that President Obama’s sequester concept is the only real answer.
It took 10% cuts across the board for the budget until the debt came down to more reasonable levels.
This would get severe protest from entitlement programs like Social Security, Medicare and Medicaid.
I am a firm believer that you can’t tax your way out of debt.
Even when the tax collection increases the spending goes up more.
The only real solution is when everyone has to take a hit.
What are the chances of that happening?
The same as winning the Lotto.
The debt issue will be kicked down the road until after the election so we have time to make some more money.
Never bet against an election year
