PUT IN WORK (10/23/2023)

The stock market took another big tumble last week as indices fell across the board. While the S&P 500 (SPY) fell 2.4%, the Nasdaq (QQQ) fell a whopping 3%.

The reason for the market’s seemingly continuous downward movement is the same as it has been over the last month or so: uncertainty. We’ve said it before, and we’ll say it again: investors despise uncertainty. Uncertainty can even be worse than definitive bad news, as we’ve seen repeatedly. Uncertainty keeps investors from developing a reliable game plan and instead keeps them on their toes, waiting for the market’s next move. Many investors will forgo this anxiety entirely, opting to sell positions and repurchase them when news and global or national events become more stable.

This uncertainty continues to attack the market on multiple fronts: the Hamas-Israel war, the Ukraine-Russia war, lingering inflation concerns, earnings season, and the upcoming Fed meeting. All of it contributes to investor uncertainty and, thus, fear. Although these factors keep the market from soaring, they don’t necessarily point toward a market crash or anything as significant as that. The truth is that although these factors are certainly hindering market movement, it’s unlikely that they’ll facilitate any massive crash in the long term unless one of these issues becomes substantially worse.

The Fed’s fight against inflation may seem scary now, but we must remember that what we’ve been seeing over the last couple of weeks in the form of high yields is a result of past rate hikes. There isn’t any hidden news or event that has pushed them higher. Furthermore, Jerome Powell recently said that they plan to be more cautious from here on out, meaning we may even see some rate cuts earlier than expected after one or two more short hikes. Uncertainty will always be part of our day-to-day lives, investor or not. We must ensure we don’t let uncertainty paralyze us as individuals and as a nation.

(Nasdaq ETF (QQQ) price from October 2022 - October 2023 — each candle is 1 week. Chart provided by tradingview.com.)

PORTFOLIO UPDATE

Our portfolio fell along with the market with no notable outliers. We continue to be confident in our long-term picks and plan to hold all currently owned assets for the foreseeable future. If that changes, we’ll be sure to update you. As always, thank you for reading, and happy investing.