Hello, this is our weekly Market Alert video for the week ending Friday, September 24, 2021, and boy howdy was last week a roller coaster ride extraordinaire!
Hopefully you were able to watch our video on Monday when we saw a 500 point drop on in the Dow. We hope that brought you some peace of mind that, yes, it is a bad day; but no, the sky is not falling. And that no, it’s not the beginning of the next bear market. As it turns out, that video—at least for the time being—was correct. And that’s why we send you that kind of communication when we see things like that—we want you to have peace of mind. We don’t want you to worry. We want to do the worrying for you. So, we hope that that served its purpose.
This video is basically going to be a reiteration of that video.
The issue in China, of course, is the Evergrande, which is one of the largest real estate and financial institutions in China. They’re missing their debt payment, and there’s a big concern a big collapse like that will be China’s Lehman moment where the stock market and the economy and China are all sucked down into this quagmire. We don’t believe that’s going to be the case. The People’s Bank of China gave them some money, despite what the president of China said they would not do that. They renegotiated their deal with their debtors, so they’ve been given a reprieve to figure it all out. We think that’ll take care of itself.
The other issues we’ve discussed remained the same. The inflation picture is not good. I guess the positive news is that high inflation is going to give Social Security recipients a nice big raise come January—so there’s a silver lining there.
The supply chain issues with the pandemic are creating problems. We saw, in fact, today, that Nike’s stock is down dramatically because a lot of the factories that make their sneakers in Vietnam are being shut down due to the virus. Therefore, they may not be able to meet the demand over Christmas to sell all their sneakers, and that could hurt their profits.
There’s still a lot of that—the supply chain is still an issue. That’s causing inflation. The Federal Reserve is still on the sidelines saying they’re going to be helpful and that they’re not going to raise interest rates. The environment there hasn’t changed, so we continue to believe the market will climb to more all-time highs later on this year and into the next year. We still think we’ll see that.
Now, it’s going to be a bumpy ride, particularly because of the whole debt ceiling issue. It looks like there’s going to be a government shutdown, but we don’t know that for sure. They may actually get to the point where they say they’re going to shut down. They’re going to threaten all kinds of terrible things; but in the end, as we’ve seen in 2011 and many other times, at the end of the story they’ll will come to a deal. They’re not going to let America go bankrupt and destroy our economy and create all kinds of havoc. So, if we do see the market go down due to anxiety over the debt ceiling, we consider that to be a buying opportunity—not something to get overly worried about.
The forecast looks pretty good in terms of where we see the S&P and the Dow going from here. It’ll be a bumpy ride…but again, we don’t have a crystal ball, and the thing that usually causes bear markets is not what everybody anticipated. It’s usually what people did not see coming. It’s much like a boxer, you know, they can get hit by a lot of punches they see coming. They can brace for those, and yeah, it hurts and all of that, but it doesn’t knock them out. It’s usually the punch they did not see that knocks them out. It’s the same thing with what happens most of the time with bear markets. Something comes out of the blue that people were not anticipating, and that’s what causes everything to turn upside down. We don’t know what that will be because it comes out of the blue—and that’s why we have our Invest and Protect Strategy™. You need to have a strategy in place beforehand to help protect you from what you don’t see coming. You don’t want to create it while you’re in the middle of all the stuff that’s going on.
We hope you have peace of mind knowing we have our Invest and Protect Strategy™ ready to be implemented should there be a major threat to your financial wellbeing. We want your money to last as long as you do, and we want you to enjoy your second childhood without parental supervision. We want to do anything we can do to make that happen.
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