March 2024 Watchlist: Entry Points

Market Overview

Welcome back to The Wealth Catchers' watchlist. The month of February was a bullish one for investors. We saw all the indices, except the Russell 2000, hit all-time highs. Even with inflation still proving to be sticky, it seems like the effects of it are slowing and waning. Inflation rose 3.1% YoY for the month of January when comparing January 2023 to January 2024. February's CPI data will be released on March 12th. The market is still looking for the Fed to announce rate cuts. We came into 2024 expecting roughly 6 rate cuts, and we have seen that number cut down to potentially 3. And there are some who believe there will be no rate cuts at all. Wage growth is rising, the stock market is roaring to the upside, and the economy is growing. All of these factors give way to the argument that rates may stay higher for longer because there isn't anything showing that we NEED the rate cuts. M&A activity is expected to rise, we have IPOs being announced, and we see that we are in a risk on environment. Now, in my personal opinion, the reason we are seeing this risk on appetite is because we believe that rates will be cut. If this turns out not to be true, I don't know how the market will react. It's a tough thing to gauge because the market has now adjusted to this high-rate environment and didn't buckle under it. But my belief is that the forward guidance and actions of the market are pricing in and EXPECTING a lower rate environment. We can see this in the FedWatch Tool that the market is pricing in that there's a 53.9% chance that the Fed will begin rate cuts in June. I believe we will still see rate cuts this year, just not as many as we expected.

Crypto & Digital Assets

To double down on the risk on environment, the crypto market is absolutely on fire! If you read the July 2022 Watchlist, I mentioned how we were in a "crypto winter" and that the crypto market cap was under $1 trillion. A year and change later, the story is much different. The crypto market is now sitting at $2.3 trillion, and Bitcoin and Ethereum are trading at $63,000 and $3,400, respectively. We are definitely in an environment where it seems like everything is in a frenzy. I would like to remind you: don't chase and don't have FOMO (Fear Of Missing Out). Don't let your emotions overtake your decisions. I discussed how we deal with this in the February 2023 Watchlist. In times of uncertainty, when the companies we own/want to own are getting beat down and everything is screaming "Sell!" that's when you trust your research and get into position. You need to keep yourself educated and abreast of what's going on and have some dry powder on the side in order to capitalize on opportunities. Last fall, through the months of August-November the market was basically in shambles. That's when you deploy, attack, and get into positions. When we had that crypto winter in 2022, get into position. Believe in your research, believe in your investment, know when to pivot, and most importantly, believe in yourself

Monthly Performance

At the close of the month, here are how the indices performed:Dow Jones (1.24%)S&P 500 (3.87%)NASDAQ (4.75%)Russell 2000 (4.07%)At the close of the month, the VIX was at 13.40. At the close of the month, the "Fear and Greed" index was at 79, indicating extreme greed in the market.

Closing Note

I appreciate you checking in, and here's your friendly reminder:

“The time to buy is when there's blood in the streets.”

Keep on buying assets; there's always a bull or bear market somewhere. Keep your money working.