Republic Risk: Beating the Weight

The Model Portfolio is still well ahead of the Weighted S&P 500 Index, but we're watching prices drop right now in the center of a negative equity event.

Equity Storm Watch Is RED on the S&P 500 and RED on the Russell 2000

In just a few months, we've gone from expecting an interest rate cut in June to the new outlook for no cuts… until at least September—and maybe even none in 2024. Simply put, the Fed is looking at the data, and the data is screaming back at them. What do we make of this? 

There appears to be more liquidity on the horizon, but rising interest rates will impact collateral and likely lead to more volatility and price swings. We have nine sectors in the red, and energy and materials have weakened. The outlook is shifting - and now it’s starting to look like this could be the start of something much bigger. When these signals are RED, I highly recommend you manage existing positions and only buy companies with strong tailwinds, great finances, and a large economic moat. This is getting quite bumpy - and I’m starting to expect that we will get to at least that 8% peak-to-price on the S&P 500. So far, we’re just about halfway…