The Data that Matters
Hello everyone! Welcome to the May 2023 edition of the boodle blog. If you are new here, thank you for joining us, and if you are a repeat client, welcome back! The boodle blog is a tool for you to help you understand what is going on in the market, based on our 25 years of market research, so that you can decide how best to manage your own portfolio. Boodle is your #1 destination to learn about all things financial. We believe that the person who is best qualified to manage your portfolio is you. Our job is to watch and study the stock market and the economy. We relay this information back to you in the form of this blog, then we meet with our consulting clients and offer additional assistance.
Before we look ahead to the month of May, let's take a look back at April and see what happened in the 3 tracking indexes. The DOW added 2.48% to lead the indices, and the S&P 500 gained 1.46% to close out April. The tech-heavy NASDAQ was basically flat with a paltry 0.04% for April. Year to date, all 3 indexes are in positive territory.
Now, looking ahead to what we can expect in May, the Fed has another interest rate hike on its schedule, and right now these rates sit at 4.75% to 5%. Could the Fed hike rates a quarter point? Yes, it can. One of the mandates of the Fed is to "price stability", and if you have been out buying and shopping for goods, then we shouldn't have to tell you that inflation, as seen in high prices for goods & services is still a problem. So, knowing that, boodle expects another rate hike.
The economy, believe it or not, is growing but at a very slow rate. Many in the media point to the 3 bank failures that occurred this year, with the latest being First Republic Bank. This 38-year-old bank defaulted on its loans and was liquidated and sold off to JP Morgan Chase on May1. We don't like to see these sad events happen, but they are a reminder of the inherent risk of having a large share position in one security. The 52-week high share price of First Republic's stock was close to $171.00 a share. One year later, the stock had lost 99% of its value. Never forget that lesson.
Our forecast for May is a "steady as she goes" forecast. We do not expect to see much in the way of gains for May, and a small slip backwards would not surprise us. Boodle believes that a substantial gain in equites (stocks & funds), has been underway since October of 2022. We believe our forecasting tools that tell us the S&P may challenge the 5000 mark within 12 months, and if we are right about this, then your portfolio that is tethered closely to that 500 index will come close to hitting new highs.
Keep in mind that boodle is of the opinion that you should be using a "dollar-cost-averaging" approach with your money that is being added, by you to your portfolio (small amounts each month).
We believe that with all of the negative news being broadcast on a daily basis, the contrarian move is the one that we've taken, and we will know how correct we are in the fullness of time.
That is it for now. If you're currently a member, we thank you sincerely for your faith in us. If you're not a member, but are thinking about it, then contact us at 815-793-6059 and we will tell you how to start your financial journey. Until next time, thank you for choosing boodle. Have a great month.