Happy Friday! In today’s email:

• The S&P 500 Has Hit An All Time High 37 Times In 2024… What Should You Do?

• Is Inflation Cooling?

• US Housing Market Most Unaffordable In History

• Reminder: Upgrade your subscription to unlock the full length weekly newsletter which includes: my portfolio updates, more market commentary and Weekly Q&A’s below

• Stock Market Recap For The Week (Week return as of market open, Friday July 12th)

  • S&P 500 = +0.54%

  • Nasdaq = +0.01%

  • Dow Jones = +1.16%

The S&P 500 Has Hit All Time Highs 37* Times In 2024… Time To Stop Buying?

The S&P 500 has been on an absolute tear in 2024. YTD the index is up 18.79%. This begs the question, should I stop buying & wait for a pullback?

I am going to answer this question in 2 parts, followed by my opinion on the market.

1. Buying At All Time Highs Is Not A Bad Thing, On Average

   

While this sounds backwards, studies show that buying at all time highs actually results in greater returns, on average, than buying on any other day. Of course this is an average, so not always guaranteed, but the data suggests buying at ATH is not always a bad thing.

2. Sitting in Cash vs S&P 500

Assuming we are talking about investable money, even though a high yield savings account or money market account is paying around 5%, sitting in cash has underperformed the market this year. Personally I just buy every single week with the money I have to invest rather than put it in a 5% savings account. If it is money I do not need for the next 5+ years, I invest it… even at all time highs.

Conversations about all time highs always direct me back to a quote by the famous investor, Peter Lynch, who said:

“Far more money has been lost by investors in preparing for corrections, or anticipating corrections, than has been lost in the corrections themselves.”

Just something to keep in the back of your mind as we are at 37 all time highs on the S&P so far in 2024.

When talking about buying at all time highs, I am talking about the market as a whole, not every single individual stock.

My Opinion: For me, I just keep buying every single week. I was buying in 2022 when VOO was below $350 per share, I am still buying in 2024 when we are above $500 per share. I buy at all time highs. I dollar cost average. Overtime it will all work out.

Do I think the market is ready for a pullback? Yes. However no one knows when that will happen. They have been talking about a pullback for many months, yet the market keeps hitting all time highs. Those who pulled their long term money out of the market for fear of a pullback are missing these gains. When the market pulls back, guess what my plan is? Just keep buying.

What is the takeaway? Buying at all time highs may sound bad, but data suggests that buying at all time highs may not be as bad as it seems. Of course none of this is financial advice & there is no guarantees in the market. However this is just me sharing my thoughts on the conversation about buying at all time highs.

*I am sending this email before market close on Friday, July 12th. As of writing this, the S&P 500 is up on the day, which could result in the 38th record close for 2024.

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Is Inflation Cooling?

Before market open on Thursday, July 11th, CPI data for June was released:

Core CPI fell to 3.3% which was also below expectations of 3.4%.

While we have been seeing a decrease in CPI for the past 3 months, we have been at or above 3% for 39 straight months. Will July data (which is to be released on August 14th) bring us under the 3% mark?

What is the takeaway? Inflation may be cooling. The market expectations of a rate CUT are now up to 81% for September!

Quick Question…

US Housing Market Is Most Unaffordable In History

If we take a look at the Homebuyer Affordability Index, we are currently below 100. We have been below 100 only two times… 1989/1990 & 2006.

Both times ended up in a recession.

What is the takeaway? Multiple data points are pointing to a potential recession. However, as I said earlier, no one knows. I share this info with you to help you stay up to date on what is going on in the markets/economy so you can be an informed investor.

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