How to Invest in These Wild and Unpredictable Times

|May 8, 2024
Depressed businessman in front of computer with graph of unsuccessful business on the screen.

And we’re back!

Well, almost.

As I write, the S&P and Nasdaq are approaching the peaks they reached in March – back when greed ruled the markets.

These days, it’s a different story.

We’re edging back toward the green… but a rocky earnings season, persistent inflation and high interest rates have the average investor still feeling unsettled.

When markets opened this morning, CNN’s Fear & Greed Index had us at a 38 – firmly in “Fear” territory.

CNN’s Fear & Greed Index

However, that’s up five points from a week ago. And, as we noted up top, stocks have just about recovered from the lows we saw a few weeks back.

But as Shah has cautioned again and again recently…

Investors need to be careful.

From Shah’s Monday Takeaways:

We’re seeing stuff move up, and it looks good… But let’s see how things go this week because we’ve just gotten to somewhere. We haven’t gotten anywhere important. We’re just working our way back up in a downtrending market to somewhere higher… And whether we can consolidate here in any of the benchmarks and move higher yet remains to be seen.

We’ll get a better understanding of this market’s strength as events unfold this week. Today we saw earnings releases from heavy hitters like Uber (UBER), Anheuser-Busch (BUD) and Airbnb (ABNB).

Before the week is out, we’ll get a peek at the numbers for Brookfield (BN), Sun Life (SLF), Constellation Energy (CEG), Enbridge (ENB), Costamere (CMRE) and other big names.

Will they continue the earnings trends Shah noted here? Where everything looks peachy… except for revenue figures?

We will see.

But if cost-cutting is the only way for companies to inspire confidence among investors… that’s a troubling sign for future earnings cycles.

The good news is… we can always bypass the notion of “earnings” entirely by shifting over to crypto.

Dip Buyers Unite!

Talk about a sector driven by narrative.

Crypto falls in and out of favor like high-waisted pants.

One day Bitcoin is hitting new all-time highs… And the next, it’s plummeting.

In short: There’s a reason why crypto investors have adopted that HODL (Hold On for Dear Life) mantra.

Those who’ve been willing to stick out the volatility have been rewarded handsomely as the crypto market grew to a size of more than $2 trillion over the past decade.

Of course, as you can see by the many peaks and valleys in our chart below… the ride has rarely been smooth.

Total Crypto Market Cap

Even so, as Robert wrote here on Tuesday, crypto volatility is a feature (not a bug).

“This pattern of sharp declines followed by robust recoveries highlights the volatile yet upward trending nature of major cryptocurrencies,” he said, “something crypto critics refuse to accept.”

And really, it’s the same across markets of all kinds. The best time to buy is often when share action looks least enticing.

Every investor knows they should “buy the dip.”

Yet too few actually do.

That’s a point worth remembering in these wild and unpredictable times.

Alex Moschina
Alex Moschina

Alex Moschina is the associate publisher of Manward Press. A gifted writer, editor and financial researcher, Alex’s career in publishing began more than a decade ago when he worked at one of the world’s leading providers of academic research and reference materials. Alex first cut his teeth in the realm of investing when he joined the team at White Cap Research in 2010. There he was charged with covering emerging market trends and investment opportunities. A stint as senior managing editor and editorial director at the prestigious Oxford Club followed. A frequent speaker at conferences and events, Alex has led educational workshops across the U.S. and Canada.