Good afternoon friends,
As we reach the midpoint of 2024, it’s time to reflect on the market’s performance so far and discuss our strategies moving forward. The first half of the year has been promising, with the S&P 500 up 10.77% and the Nasdaq 100 up 10.55%. The Dow Jones has seen more modest growth at 2.34%. These gains underscore the importance of staying invested and taking advantage of market opportunities even after a great year in 2023.
Navigating the Market: Gains and Opportunities
Our belief in the market’s potential was grounded in fundamental analysis, which involves evaluating a company’s business outlook, financial statements, and the broader economic environment. But today, technical analysis has also played a crucial role. This method focuses on chart patterns and indicators to guide buy/sell decisions, regardless of the asset.
Evaluating Safety: Locking in Longer-Term Rates
For clients seeking safety and low volatility, now is an opportune time to consider locking in longer-term rates. With potential interest rate cuts on the horizon, longer-term bonds and fixed-income investments offer a way to secure stable returns amidst economic uncertainty.
Our Unique Approach at RollingWave Capital
At RollingWave Capital, we integrate both fundamental and technical analysis. This dual approach allows us to identify what to buy based on solid fundamentals and determine when to buy using technical insights. This strategy is particularly valuable in an industry often looking for shortcuts, ensuring that our clients benefit from a comprehensive and informed investment approach.
Additionally, we often favor using hedges in lieu of selling. Hedges, such as options or inverse ETFs, provide a way to protect your portfolio against potential downturns without having to sell your investments. This approach allows you to stay invested in the market, benefiting from any upward movements, while mitigating the impact of adverse price changes. The benefits of hedging include reducing portfolio volatility, preserving capital, minimizing taxes, and providing peace of mind during uncertain times.
Historical Context: Learning from the Past
Historically, the second half of an election year tends to be favorable for the stock market. Since 1950, the S&P 500 has gained an average of 7.5% in the second half of election years. This pattern is often attributed to increased government spending and pro-business policies aimed at securing votes. This historical trend supports a bullish outlook for the remainder of 2024.
Path of Least Resistance
Given the current market dynamics, the path of least resistance appears upward. The combination of technical breakouts and supportive fundamentals, coupled with the possibility of rate cuts, points towards continued market growth. However, we remain vigilant about economic and geopolitical risks that could disrupt this trend.
Staying Balanced: Growth and Stability
Our strategy emphasizes a balanced approach. For growth-oriented investors, this means leveraging opportunities in high-potential sectors like technology and healthcare. For those prioritizing stability, locking in long-term rates provides a cushion against market volatility.
A Grateful Note: Thank You and Let’s Connect
Thank you for your continued trust and support. Whether you’re a client or considering becoming one, we’re here to help you navigate these dynamic times and achieve your financial goals.
Enjoy the summer and stay tuned for more updates.
Sincerely,
JC