Good morning, friends,
I hope this email finds everyone well. Before diving into the market update, I want to emphasize a crucial point: the safety of working with us. RollingWave Capital, based in South Florida, may be a boutique investment advisory firm, but our custodian (where your money is held)—a firm with over $14 billion in equity capital—ensures our clients receive the same level of security as any major financial institution.
2023 was a great year for us, and 2024 is picking up where we left off. If I could urge one takeaway from all my updates (besides that you should be doing business with us), it’s that the market is always forward-looking. It cares little about current events but rather focuses on the future, a concept even seasoned professionals sometimes overlook. This explains why good news isn’t always good, and vice versa.
My investment thesis for 2023 revolved around the following: inflation was cooling, which would allow the Fed to stop raising rates (they did), the market would anticipate this and trade higher (it did), artificial intelligence would ignite a new boom in the market (it is).
Since the first week of 2023, the tech sector (XLK) is up 69%, more specifically, Semiconductors (SMH) are up 111%, and Nvidia (NVDA) is up 448%. Those returns are not typos.
So what’s next? Well, as I love to say, “no one has a crystal ball.” Anyone who ever speaks with certainty regarding financial markets is someone to be wary of. Rather, I like to focus on historical trends to determine the path of least resistance and I believe that path today is going to be fairly sideways for the next few months.
Historically, election years are good years. Historically, the year after a year like 2023 is a good year. However, we are entering a weak time of the year; and I think the market is most likely going to consolidate the gains it’s realized over the past six months.
Does this mean to sell? It depends on what you own, how long you’ve owned it, your cash position, your overall timeframe, etc.… Does this mean you shouldn’t put money to work at these levels? Well, that depends on… all the same things.
If you are getting less than 5% on your cash, give us a call. Your banker is probably not telling you that you can get over 5%… risk-free.
I invite you to take a look at our social media accounts (Instagram, Facebook, LinkedIn) and our blog, where each market update is posted (we believe in accountability).
To our clients, thank you for your trust. To those not yet clients, let’s talk. Have a great week!