2024: If This? Then What?!
There is a lot of uncertainty surrounding 2024, and as a result, there will be five major topics (events) that everyone should be paying close attention to in-order-to protect their investment portfolios or take advantage of new opportunities that could directly result from any-and-all upcoming volatility.
As a result, a huge consideration in your trade/investment planning for 2024 could be a mantra of: If This? Then What?! What is going to be your plan A or B if the markets do crash in 2024-2025 as some are anticipating? What if the markets continue to rally? What asset classes and/or sectors will tend to outperform or underperform the current market business cycle and what impact (if any) will this have on the bond market (Inflation/interest rates)?
A lot to consider, however, we at the Trading Academy, are not in the business of guessing, or predicting. Instead, we will continue to use our “specialized knowledge” of Core Strategy to help us identify important opportunities (long or short) resulting from continued price action resulting from increased volatility.
Of course, we are all familiar with the obvious elephant in the room for 2024: The upcoming US Presidential Election; and all the politics surrounding what is yet to come. But what are the other major events we should be pondering in this upcoming year to help us avoid losses and meet short and long-term profit goals:
Economic Indicators and Inflation: Monitoring economic indicators like GDP growth, employment rates, and inflation is crucial. High inflation rates can lead to higher interest rates set by central banks, which can affect stock prices negatively. Investors will be watching for signs of inflation and how central banks respond to it. (Currently, the US Debt is 120% of GDP).
Global Geopolitical Tensions: Geopolitical events such as conflicts, trade disputes, or sanctions can create uncertainty in the stock market. Investors may be concerned about developments in regions like the Middle East, Eastern Europe, or the Asia-Pacific region and their potential impact on global markets.
Federal Reserve Policy: The actions and statements of the U.S. Federal Reserve can significantly impact the stock market. Changes in interest rates and monetary policy can influence investor sentiment and market valuations. Investors will closely follow the Fed's decisions and statements. (The Bond Dynamic Yield curve that measures long-term vs. short-term Fixed Income rates has been inverted since July 15, 2023, which could be signaling a possible recession in the future).
Technological and Regulatory Changes: Advances in technology, such as developments in artificial intelligence, blockchain, or cybersecurity, can reshape industries and affect stock valuations. Additionally, regulatory changes in sectors like technology, healthcare, or finance can impact how companies operate and ultimately their stock prices. (On June 15, BlackRock filed for SEC approval of a so-called spot Bitcoin ETF. SEC approval of BlackRock’s ETF would breathe new life into Bitcoin and Crypto markets and end the Crypto winter).
Environmental, Social, and Governance (ESG) Factors: ESG considerations, including climate change, social responsibility, and corporate governance, are becoming increasingly important for investors. Companies that don't meet ESG criteria may face reputational risks and regulatory challenges, potentially affecting their stock performance. (The growing movement to cut carbon emissions, and move toward electrifying everything).
Finally, a continued concern over the possibility of an Everything Bubble, which will leave traders and investors asking themselves, “What do you do if every asset you’ve invested in is in an extended market rally?” (Equities, Bonds, Real Estate, etc.)
As you start to get your head around all that may or may not happen in 2024, a few suggestions that may help put your mind at ease, and help you to create a solid trading or investing plan for this new year:
Strategic Investor Class: Learn the fundamental principles of personal financial management, including a broad overview of equities, bonds, 401(K) plans and key steps to strategic investing. Lessons include how to custom tailor a Strategic Asset Allocation model to fit your personal objectives. The course begins with a series of pre-essential, on-demand lessons covering basic concepts and terminology to help maximize class time with the instructor. The course is 30 hours of classroom instruction with interactive lab exercises in a hands-on learning environment.
Bonds: The Market’s Canary in the Coal Mine Focus Class: Bonds and the bond market are greatly misunderstood. Traditionally, bonds have been a haven for investors seeking income and safety, and although that certainly is still true today, bonds offer so much more to those savvy investors seeking to understand market drivers and market dynamics. Today’s bond market also offers unprecedented volatility for the more active traders. In this class, we will address this investor group by looking at bond ETF’s and Futures, which offer the retail speculator much greater liquidity and transparency than bonds themselves Additionally, the bond market is also an economic forecasting tool (as well as historically a very accurate forecasting tool). We will review what economic phases we might encounter regardless of the business cycle, and how the bond market continues to remain a key economic driver, and forecasting tool.
Value Investing Focus Class: When someone begins their journey in financial education and trading the financial markets, they are often attracted to leveraged asset classes such as Futures, Forex, and Options due to their capacity to generate short-term income. However, trading short-term should only be done using one's "risk money", so what can an investor do with the rest of their net worth, their "wealth bucket"? This is where long-term investing using Fundamental Analysis comes in.? This class will teach investors?how to screen through the thousands of public companies?for strong candidates, how to further analyze these candidates Quantitatively and Qualitatively, and how to calculate their Intrinsic Value using the Discounted Cash Flow model (i.e., The Warren Buffett Way)
From all of us here at the Trading Academy, we want to wish you all a happy, healthy and profitable New Year!