Stock market steady, despite economic challenges
Boys and girls, this is like watching paint dry. The market is about where it was 9 months ago, which is not necessarily bad. We are actually up (the S&P) about 3% for the year. I am writing this on Thursday, March 2. I would not mind if we had a little weakness, to be honest with you. I have some cash which I could allocate, but I like a little lower price.
The reality is that with everything that is going on in our world, we could be much lower. We live in the best country in the world and our economy is stronger than most, so it is what it is. Again, I am not unhappy with the performance of the markets. I am an investor like you, so I am happier with higher prices, but the market does what it does, and I just follow along.
So, what am I doing? I constantly review investors’ accounts so I am making sure we are where I think we should be. As I have told you, no one knows what is going to happen, so high quality and patience is key. I get rid of investments that don’t belong and strengthen accounts that need it. Historically, markets have always recovered, so patience is really important. Keep saving your money and don’t stop investing.
We are still at least, depending on how your measure, 15% below our high back in 2020, but we have made significant strides and our economy has been surprisingly strong. Employment numbers are good. And many businesses are still not at full strength because they cannot find employees. Nobody can figure out where they all went.
My guess is that retirement is playing a big part. Lots of people said: “I’m tired of this. I am just retiring.” They got tired of being laid off and not having a job. Service jobs like restaurants are still hurt for employees. Even higher paying jobs are going without. It’s an interesting problem.
It has given me a certain amount of joy to see some stock prices tank of companies I did not like. Electric vehicles, in my view, have gotten way ahead of themselves. Our country is not ready for them. Personally, I will never own one. Cost, fuel, whatever. The government is giving us credits if we buy them. Anytime you must be paid to do something is not normally good. If you do not want to do it all by yourself, it is likely not a good idea. I think EVs are on the way. I just do not see it happening next Tuesday.
Having said all of that, there are some investments you might want to look at. Artificial Intelligence, which is what my wife says I have, is interesting. I think this is something else that is coming on a large scale but not next Tuesday. Right now, I see things that I think will work but it takes patience. Most investors don’t have that.
Getting some help for yourself is also key in my view. Most investors I know would be selling when they should be buying and buying when they should be selling. I’m sorry boys and girls but that is what you do. Find somebody you trust and like and give them money.
There are opportunities for you that you may want to consider. The One Year U.S. Treasury bill is yielding over 5%. The two year is yielding around 4.9%. You may want to consider some of both.
Why wouldn’t you just buy all of the one year? Because if the one year matures and rates are lower, that would not be good. I always hedge myself so I can’t be 100% wrong.
I told my wife my friend Louie called me the other day. He said he had been standing outside a phone booth for 30 minutes and had not said a word. I said, how is that possible? He said he was talking to his wife. My wife does not think I am funny.
Howie Pentony is a Portersville client portfolio manager.