“The bubble is about to pop”, right? After years of the constant drumbeat about an “inevitable” recession, the market is sitting near record highs again. But for those paying attention, the mood under the surface feels different. The leadership baton is being transferred …not toward the headline-making names that powered the last leg of the bull run, but toward the quiet, defensive corners of the market: utilities, healthcare, and consumer staples. The kinds of stocks you buy when growth gets wobbly and investors start seeking shelter.
And yet, despite the sector rotation, the broader indexes remain firm. It’s almost as if you’re daring us to overthink it.
This morning I had the pleasure of speaking at the Seal Beach Chamber of Commerce breakfast at the Beach House … a room full of business owners, community leaders, and friends. For those who don’t know me, I’m Matt Pixa, founder of My Portfolio Guide, LLC, an independent fee-only wealth management firm. I’ve been honored to serve on the Chamber’s Board of Directors in the past, and was named 2021 Businessperson of the Year. While my schedule doesn’t allow me to attend as often as I’d like, it’s always a privilege to come back, reconnect, and hopefully provide a few takeaways that help people make smarter financial decisions.
Instead of giving a 15-minute “commercial” about my firm, I wanted to do something more interactive. So I asked everyone to take one of my business cards, flip it over, and write down the word RETIRE. Each letter became a conversation point for one of the six key areas of financial planning every person should be thinking about — no matter their age or stage of life.
These are the pillars that determine whether your financial plan can withstand market volatility, economic uncertainty, and life’s inevitable curveballs. If you missed the breakfast, here’s a recap of the discussion (and yes, you can watch the full 18-minute video below).
Ah, tariffs. The misunderstood villain of the economic world, blamed for everything from rising grocery bills to why Uncle Bob’s imported car parts now cost a fortune. But let’s set the record straight—tariffs are not always a pure cause of inflation. At least, not in the way most people think.
Ah, Mr. Market, you’ve never been one for subtlety, have you? We’ve all grown accustomed to your erratic behavior, but these past few weeks, you’ve outdone yourself. The dizzying heights we’ve climbed recently have turned into a sharp, gut-wrenching descent. It’s like we were steadily walking up the stairs, only to realize we were stepping into an elevator shaft, and now gravity is having its way with us.
The Stairs Up: Slow, Steady, and Full of Hope
For the past year, we’ve been witnessing a remarkable climb in the market. Fueled by optimism, the scent of economic recovery was in the air. Tech stocks were soaring, companies were beating earnings expectations, and the Fed’s steady (or perhaps stubborn) hand reassured us that we were on fairly solid ground. Like the patient climb of a seasoned mountaineer, each step forward felt measured, deliberate. Investors were content, seeing their portfolios grow incrementally with each passing day.
If your alma mater or favorite college team did not make the tournament on Selection Sunday, we’ve got another option for you!
Even if you don’t like or follow college basketball, we think you’ll enjoy what we pioneered and have put together.
My Portfolio Guide, LLC was the first investment firm to publish a March Madness investing bracket where we share our picks and match them up against each other. We break down and assign each of the four “regions” with an asset class and then pick teams (stocks) that we think have the best chance at doing well relative to others.
Not only is this “exercise” a way for us to share our ideas from a macro perspective, but it offers a fun platform to dig into a couple specific investments and themes we are following or excited about in the year ahead.
Click here or below to see or enlarge the entire bracket for 2024.
Our Final Four Investing Bracket slots 48 positions against each other and we mainly want to show why we see one investment doing better than another over the course of the next year. One caveat to keep in mind is that while there are 48 total investments within our bracket, it does not mean we like them all; some are there for illustrative purposes or to discuss a certain theme playing out in the stock market. Lastly, the way these are initially “seeded” does not reflect our current confidence in them. For example, a #1 seeded investment could lose right out of the gate just as a #12 could potentially win it all. In other words, these investments (or “teams”) are ranked and seeded on a number of factors but one of the main drivers is how hot they recently performed within the past few months or recent year.
First off, if you want to know how amazing Artificial Intelligence is, the following list of article titles were generated for this article in the matter of four seconds! (we picked the first one and the rest of this article is typed with regular human toiling!)
FYI: If you’ve never used ChatGPT, before try it! Much of its delivery is on what and how you ask things and in this case here is the prompt/reply that we asked of it:
Certainly! Here are a couple of article title ideas that play on the “going long” football reference while discussing extending bond allocations, especially in a recessionary context and using the TLT ticker symbol:
“Going Long in Two Fields: Why TLT Could Be Your MVP During Recessions”
“Huddling Up for Stability: TLT’s Game Plan for Going Long in a Recession”
“Scoring Big in Bonds: Going Long with TLT Amidst Recession Signals”
“Touchdown for Investors: TLT’s Playbook for Going Long in Uncertain Markets”
“Bonds and Touchdowns: TLT’s Strategy for Going Long in Recessions”
“From Gridiron to Portfolio: Going Long with TLT’s Defensive Play”
“Executing the Long Game: TLT’s Endurance in a Recessional Season”
“Tackling Recession Risk: Going Long with TLT’s Defensive Line”
“The Bond Field Advantage: Going Long with TLT Amid Market Turbulence”
“Scouting for Opportunities: Going Long with TLT’s Recessional Defense”
Now…on to business and what we’re talking about today, which is not related to football but rather recession worries, market strategy, and in our opinion how one should consider adjusting the bond piece of their allocation to hedge what we see coming. If you’re in the growing and increasingly popular camp of preparing for a stock market crash or just a general recession, here’s one adjustment and hedge that you may want to consider.
Let’s first remind our readers again of who this “Mr. Market” character is. Our investment blog and star personality is in reference to Benjamin Graham’s metaphor in his book “The Intelligent Investor,” where he personifies the stock market as Mr. Market, an emotional and erratic character. Over the past few decades, rarely have we seen such unprecedented market action but also a total tug of war between emotions, volatility, politics, and who will win ; the bulls or the bears. If you’re in the camp of being scared, confused, or frustrated…you are definitely not alone.
Aside from extending our warmest wishes to you for a Happy Thanksgiving, we want to remind you that there is something else happening this time of year. We’re entering the strongest part of the year for the stock market as well as one that historically has the best chance to surprise everyone to the upside now that the midterm elections have passed.
“In the business world the rearview mirror is always clearer than the windshield.”
Everyone following the markets is aware that we’re dealing with global economic stresses, a bottle necked supply chain, geopolitical tensions, 40 year highs with inflation, rising rates, and literally the worst start to a stock market year since 1970. It’s got the entire crowd nodding their heads in agreement that these are some brutal times. We’re also clearly in an environment with much groupthink and division…but more on that later.
Dear Mr. Market: 