📰 Sunday Edition 45: Housing Sales Up, Market Up, Are We Good?

👋 Hey, Mike here! Welcome to ✨ Sunday Edition 45 ✨ Each week I dive into the markets, the economy, and investing.

Quote Of the Week

The possibilities that lie in the future are infinite. When I say ‘It is our duty to remain optimists,’ this includes not only the openness of the future but also that which all of us contribute to it by everything we do: we are all responsible for what the future holds in store. Thus it is our duty, not to prophesy evil but, rather, to fight for a better world.

(Karl Popper, The Myth of the Framework)

Markets: Don't Freak Out

The S&P 500 is up 1.4% this week, outperforming the Nasdaq which returned 1.0%. CBOE Vol (VIX) popped 3.3% this week, while Oil (UOL) tanked -1.0%, signifying increased market uncertainty. Bond yields rose moderately, with the 7-10 Year (VGIT) up 0.6% and the broader Bond Market (BND) gaining 0.7%. Commodities showed mixed performance, as Copper (CPER) rallied 1.5% while Gold (GLD) remained flat. This diverse market movement suggests investors are balancing optimism in equities with caution in other sectors, potentially positioning for economic shifts ahead.

The S&P 500 is trading above both moving averages, showing a positive trend:

In the ever-changing landscape of financial markets, it's common to encounter waves of fear and uncertainty. This apprehension, while often unsettling, is a natural part of the investment cycle. It's crucial to remember that market volatility is not just normal, but an inherent characteristic of healthy markets.

No one, not even the most seasoned experts, can predict with absolute certainty what the markets will do tomorrow. This unpredictability is both a challenge and an opportunity. While it may breed anxiety, it also creates potential for those who are prepared and informed.

The key lies not in trying to foresee the future, but in staying vigilant and adaptable. By paying close attention to market trends, economic indicators, and global events, investors can position themselves to make more informed decisions. Remember, successful investing is often about managing risks rather than avoiding them entirely.

In times of market turbulence, it's wise to stay focused on your long-term financial goals rather than getting swayed by short-term fluctuations. Embrace the uncertainty as a reminder to diversify your portfolio and to continuously educate yourself about the markets.

Sectors: S&P FTW

Real estate popped 3.8% this week while the energy sector was the only negative change with -0.1%. The S&P 500 shows a whopping ~28% 1-year change, bringing the 3-year CAGR to 7.8%. Information tech still at the top with 22.5% CAGR over the last 5 years.

Economy: A Focus on Housing

Existing home sales and new home sales are up:

Notice how the average 30-year mortgage in the U.S. is now down to just under 6.5% from almost 8% in 2023:

It's nice seeing the housing market cool down a little bit, but we still have a long way to go. As I've stated before, I think it'll take quite a bit more to make long-lasting change in the housing market.

Portfolio: Performance

The S&P 500 performance has been unreal the last year, however, there's zero FOMO (Fear Of Missing Out) on my end. I'm sitting at 30.5% 1-year performance.

Here is the current portfolio: