Market Review for July 2023

Market Review for July 2023Market FOMO

As mentioned last month, the S&P 500 and NASDAQ 100 have had some of their best starts to a year in recent memory. With overall sentiment coming into 2023 calling for a slowdown in the economy and further declines in the overall markets, many investors were caught with funds on the sidelines. This has caused a widespread feeling of "FOMO," helping drive market performance higher into the year's second half.

For those unfamiliar with FOMO, it stands for “Fear of Missing Out.” FOMO means that certain actions are performed during an arising fear of missing out on an opportunity or a chance. For instance, investors may invest in a particular stock due to the fear of missing out on a good investment opportunity. The concept of FOMO has caused several investors to invest in ways that are not really recommended.

In the financial market, FOMO can also be clearly seen when an investor experiences remorse or regret after missing out on a huge rally in the market. Due to this impulsive urge to not miss out on any opportunity, several investors make hasty and impulsive decisions without much thought. FOMO typically leads to very near-sighted and ill-tempered decisions by investors, ultimately costing them in the long run.

At Correct Capital Wealth Management, we aim to help our clients reach their long-term goals. Through sound investing practices and a long-term approach, we can help our clients invest properly without the emotions of FOMO. While others are woefully jumping into the markets, chasing after high growth returns, we are being tactical and picking our entry points with conviction. We do not let short-term swings in the market affect our long-term outlooks and interfere with our decision-making.

An example of this would be our strong weighting to value stocks across the board. Value stocks, such as JPMorgan Chase, Berkshire Hathaway, and CVS, to name a few, had a magnificent 2022, pacing the S&P by nearly double digits. Now, after the run-up in growth this year, those valuable names look to be an attractive buy for investors entering the market at this stage.

Undoubtedly, the Federal Reserve (FED) will be raising rates by another 25 bps later this year, but the real question remains… how soon will the FED decide to cut rates, and what causes them to cut? Will the economy finally hit a wall, forcing the FED to cut, or will inflation finally be over, which opens the door for the FED, or will we see a sticky inflation environment where rates stay higher for longer? Either way, we know that by continuing to purchase assets through a subjective lens and maintaining a long-term outlook on the market and economy, we can continue to help our clients meet their financial goals.

Again, we believe in the power of a long-term mindset, one where we can focus on your financial plan and help you ensure that all your needs will continue to be met.

If you'd like to discuss your financial, investment, or retirement needs with a financial advisor, call Correct Capital at 877-930-4015 or contact us online today.