Anyone else feel like we’re in a weird market right now?🤔 The S&P keeps hanging around all-time highs, but looking at individual stocks, you wouldn’t necessarily know it. Plenty are well off their highs, and over 40% of the S&P’s stocks are actually down this year despite the index being up around 14%. That’s why I think the equal-weight S&P is worth watching. The biggest companies can carry the regular index while a lot of stocks struggle underneath. Looking at both gives you a better sense of how widespread the gains really are. Then you have the 10-year Treasury yielding around 5.2% (risk free rate). That’s real competition for stocks. If investors can lock in that yield, taking on the uncertainty of a company’s future earnings needs to offer enough upside to justify it. It doesn’t make bonds automatically better, but it makes the price you pay for a stock matter even more. And with the Fed raising rates in September and inflation still an issue, I wouldn’t build an investment thesis around cheap money coming back anytime soon. Personally, I think this is a time to be selective. An index near its highs doesn’t mean there aren’t opportunities, but a stock being down 30% doesn’t mean it’s a bargain either. Are earnings and cash flow improving? Is the debt manageable? Does the valuation actually make sense? There’s a lot going on beneath the headline numbers. Are you buying here, or waiting for better opportunities? 👇
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Alvaro Munoz@alvaro24 · 2m
I wish Iran, Israel, Strait of Hormuz,Tariffs, Ukraine, and Russia would just make up and kiss. The financial world would be much better. And gas prices too.
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