The Recap
The chart below is what we talked about last week on Tired & Rich.
I compiled the 11 sectors within the S&P 500 so you can see what happened in the market after Trump was elected President and Congress flipped.
Some crazy stuff happened within your portfolio last week.
Post election, the market immediately diverged, and investors began speculating on what spots in the market would do well under a Trump presidency.
It was a form of market chaos with hundreds of billions of dollars sloshing around, looking for the best places to grow.
Wild.
The week ended up being the market’s best performance of the year.
At the end of last week’s Tired & Rich edition, I mentioned that the market would most likely revert to a more normal trading range.
The Winners, and Losers, have Emerged
Here’s how things have turned out.
This is exactly the same chart as last week, with the only change being the performance through yesterday.
As you can see, two groups exist in the market right now.
You’ll see them bunched together; the winners are higher, and the losers are lower.
Discretionary, Financials, Energy, Industrials, Tech, and Communications are the winners.
The losers are Staples, Utilities, Healthcare, Materials, and Real Estate.
We started November with a relatively normal trading range, with the entire market trading together (with the exception of Real Estate, which is trading lower because of the interest rate outlook).
Then, the market (and your portfolio) blows out with the election, and now, we have a group of winning sectors and a group of losers a week and some days later.
This is real stuff happening within the market, and here’s what it’s telling us:
- The tech trend (Tech) is still thriving.
- The US consumer (Discretionary and Comm) is healthy and spending.
- Defense spending (Industrials) look robust.
- Healthcare is an unknown.
- Real Estate took a step back because of higher interest rates.
- Investors took some profits in Utilities.
Everyone, myself included, is wondering what will happen over the next four years. While no one has a crystal ball, this chart represents where people are betting their own money about what will happen in markets, and our economy.
But Who Cares?
Here’s why I am sharing this stuff with you.
Markets are forward-looking machines.
We lead them, and sometimes, they lead us.
Either way, they are always looking ahead.
And here’s the deal: there’s what people tell you will happen, and then there’s what people do with their money.
This chart reveals what people are actually doing, based on the math of a Trump Presidency, a Republican Congress, a central bank cutting rates, strong consumers, a good economy, and stable inflation.
Remember: do as they do, not as they say.
Now, I don’t want you to assume I’m a day trader or something crazy like that. If you were a client of Fjell, you would know we are long-term, multi-asset investors.
We invest across different asset classes and love to buy innovative companies at great prices, as well as other attractively priced income-producing assets.
That’s what we do.
But while that’s how we invest, sometimes the market gives us clues about what’s to come in a series of days and weeks.
In fact, it’s been doing this the whole time.
And for the investors who have stayed the course over the last few years, who stayed investing through the horrible 2022, who earned back the losses in 2023 only to arrive at the doorstep of 2024 not knowing how things were to unfold, enjoyed a week of returns that hardly ever happened.
It’s been worth staying invested.
Furthermore, the market tipped its hand as to what’s likely to come to those who are paying attention (like you, readers of Tired & Rich).
Change is Constant
The game has changed.
Thank you for bearing with me as we discussed the market yet again, thousands of you have responded to our surveys, and this stuff is on your mind.
And take me up on what I told you was a brilliant thing to do in last week’s edition: look at the stuff you own in your portfolio.
Understand what you own and why, and then what the plan is moving forward.
If you want a free resource to help you, here you go.
We’re having just these conversations right now with our Fjell clients.
But in the midst of all of this, the retirement planning landscape is changing at an equal rate, and you have to be attuned to this.
With that, I want to invite you to our next webinar, “Changes to Retirement Planning in 2025.”
Many of you, like 10,000+ of you, are nearing retirement (15 years or sooner), and there have been a lot of changes recently to digest.
Including the new 401k Super Contribution rules for 60-63 year olds.
There’s also the myriad of tax proposals on the table that will affect retirement.
And something as simple as the interest rate situation, inflation, and how to produce more income in retirement.
We’ll discuss these changes next Wednesday at 11 AM CT on Zoom.
It’s free, and I’d love to have you there.
You’ll gain a lot of practical knowledge so you can retire on time with enough income to feel secure and comfortable.
The only thing constant is change.
The market just reminded everyone of that truth.
Now, it’s up to you to respond.
