Monday Takeaways: Advice for an Upside-Down Market
If you’re serious about building wealth… I have some important advice for you today.
It doesn’t matter whether the economy looks shaky…
And it doesn’t matter whether we get six rate cuts or three.
You have to look at the big picture.
And in today’s video, I break down exactly what it’s telling us.
Click on the image below to watch it.
Hey, everybody. Shah Gilani here with your Monday Takeaways. Just a couple for you today, but they’re pretty powerful.
Last week, looking at the fed fund futures, everybody was talking about, “Oh my goodness, the fed fund futures are now indicating that we may not see six rate cuts in 2024.” Maybe there’s going to be five, maybe it’s going to be four. And expectations in terms of percentages went from a 70% expectation – based on how the futures were trading – that we would see six rate cuts in ’24… so now we’re getting closer to 50% that we see four.
So expectations have changed in terms of people putting their money down on a trade that will benefit them, will pay off if we get cuts. Well, now they’re pulling back on that. And so [people are expecting] fewer cuts.
Doesn’t that mean the market’s likely to stall? So what’s the takeaway? It went up.
The takeaway is, it doesn’t matter anymore because rates are going to get cut at some point. But what really matters is: Are there going to be any more hikes? And the answer is no.
Is it possible that we would get a hike if inflation all of a sudden doubles back up? Yes, but that’s not anywhere on the horizon. So what does that mean? It means that the market’s going to go up because it’s front-running. People are front-running what they believe is going to happen… whenever it happens.
And the takeaway there is to look at the big picture. If you’re trying to analyze too much stuff, you’re going to miss the big picture.
And the big picture is almost always the trend. And the trend is your friend. The market, the S&P, made a new record high last week.
What’s the takeaway from that?
In spite of people being worried about not getting rate cuts… in spite of people being worried that, “Oh my gosh, it’s just a handful of stocks again moving the market higher”… and it’s not even the seven. There are fewer stocks now, but they’re still the big, powerful tech names.
Yes, it’s odd, but it doesn’t matter. Don’t overanalyze. The takeaway from the record last week is that the trend is still higher. The last takeaway is that it’s like déjà vu all over again, isn’t it? Why? Because this looks like last January, doesn’t it? Almost exactly.
It’s the AI narrative powering the big tech names higher, and that’s lifting markets. So… what? Don’t be afraid about what didn’t work last year but ended up working… that, well, it’s not going to happen again. Because it is happening. And until it doesn’t, you ride the trend.
This year, 2024, could look very, very, very similar to last year. There’s no reason it can’t look that way. January is starting out the exact same way it did in 2023. And what a great year 2023 was. If you were on the sidelines, you missed it. You missed it. Don’t be afraid to jump in. If you’re nervous, then put stops in. And if you get shaken out, get back in. Because right now, as odd and scary and thin as this market appears to be, this is what happened last January. Yes, we had a bumpy year. It wasn’t easy, but it ended up [going] absolutely beautifully.
So the takeaway there, again, is that you don’t really need to overanalyze it… because you’re not going to have or find or create or discover answers, because there aren’t answers. There are just expectations. And right now, if you’re expecting the market to collapse based on, “Well, it doesn’t seem like a sensible rally…” It didn’t seem sensible last year, and look what happened. So the takeaway for all of you guys out there is, the trend is your friend. Go with it. I’ll catch you next week. Cheers.