The S&P 500 remains in a holding pattern after the recent bank runs, no bullish signal given.
After a mini bear rally, the Dow has given a sell signal again.
Of all things, the Nasdaq was a port in the bank run storm. We are close to a buy signal on a monthly basis.
Gold continues its move higher, with a buy signal given last year.
We always thought it was funny that Bitcoin has soared during the bank run. Most ways to convert currency to Bitcoin and Bitcoin back to currency rely on banks as intermediaries. Bitcoin benefits from bank issues and interest rate increase slowing down.
Ethereum has benefited like Bitcoin with the current bank panic. We patiently wait for our Ethereum to come back to breakeven.
The Regional Banking Index shows the damage. This won’t be undone overnight.
Bank balance sheets are impaired. The value of long duration bonds has gone down due to higher interest rates. Commercial real estate faces higher interest rates and declining demand, as more people work from home. That’s bad for values.
On many days, as we hope to eke out 4% to 6% a year in the stock market, subject to violent drawdowns of 30% to 50%, it seems investing in stocks is a fools errand. Stocks without dividend payouts seems more foolish. We haven’t sold our positions, which seems dumb. Many money managers are in the same boat. If you miss the top 10 upside days, your overall returns go down tremendously. The fear of missing out keeps us in, the siren song of future returns imperiling us from current safety. We’ll let you know how that works out.
How are you handling the current bank panic and volatility?
Sincerely yours,
smilingdad
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