Good As Gold

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    What’s going on here?

    The global economy proved its worth this year, with stocks and bonds defying expectations to finish on a glittering high.

    What does this mean?

    A recession seemed a sure bet for much of this year, but the economy has held its own – so far, at least. That’s mainly thanks to three factors: US consumers leant on their pandemic savings, companies locked in long-term loans during the pandemic, and governments spared no expense implementing economy-supporting stimulus packages. Limber supply chains, cheap commodities, and a weakening housing market helped push inflation down toward the Federal Reserve’s (the Fed) target, too. That helped stocks hold steadier than expected, while the AI frenzy did major favors for US tech stocks. Mind you, it’s not just stocks that are making investors breath a sign of relief: US corporate bonds and gold pulled in returns of almost 10%, and bitcoin’s up some 150%.

    Why should I care?

    For markets: There’s a reason it’s tough to beat the market.

    Investors banked on stocks rocketing in 2022 and crashing in 2023. Both times, they were wrong. That’s a lesson worth learning: the market has a habit of humbling investors, mainly because the consensus expectations have already been priced into asset prices. Bear that in mind when you’re watching the current uptick in stocks and bonds, a result of investors expecting the Fed to cut rates sooner rather than later.

    For you: Remember your highs and lows.

    New Year’s resolutions aren’t just for planning gym workouts and career moves. The end of a year allows investors to take stock of how their investments played out and why: poor timing, lack of research, emotional decision-making, or unforeseen circumstances are common reasons. It helps to document your investing decisions and rationale as you go, building out something of an investment journal that allows you to hone your process over time.

    Originally Posted December 27, 2023 – Good As Gold

    Disclosure: Interactive Brokers

    Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

    This material is from Finimize and is being posted with its permission. The views expressed in this material are solely those of the author and/or Finimize and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

    Disclosure: Futures Trading

    Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.

    Disclosure: Digital Assets

    Trading in digital assets, including cryptocurrencies, is especially risky and is only for individuals with a high risk tolerance and the financial ability to sustain losses. Eligibility to trade in digital asset products may vary based on jurisdiction.

    Disclosure: Bitcoin Futures

    TRADING IN BITCOIN FUTURES IS ESPECIALLY RISKY AND IS ONLY FOR CLIENTS WITH A HIGH RISK TOLERANCE AND THE FINANCIAL ABILITY TO SUSTAIN LOSSES. More information about the risk of trading Bitcoin products can be found on the IBKR website. If you’re new to bitcoin, or futures in general, see Introduction to Bitcoin Futures.

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