Sweat Your Assets Monthly Digest - February 2024

Hi ,

I just came back from a week in Cairo. If you have yet to try it, it is an experience to manage several business meetings in a city of 20 million people with hectic traffic. Still, high energy and great opportunities. Loved it!

MARKET BAROMETER

An eye view of Stock Market Indicators, as of Feb-29, 2024:

• US Fed Funds Rates: 5.25-5-50 (no changes)
• ECB Interest Rates: 4.50 (no changes)

[This month | previous month | previous two months | % changes over five years]. 

• VIX (volatility index) - the fear gauge: 13.44 | 13.83 | 12.45 | -0.96% (Fear perception is on the low-end and rather stable).
• S&P 500: 5,096 | 4,906 | 4,769 | + 81.77% (Record High, and growing).
• S&P 500 P/E Ratio: 28.11 | 26.63 | 26.43.  (Historically, the median value is 17.86, with a typical range between 19.33 and 27.91. We are now over the high end of the P/E Ratio ranges). 
• BND: USD 72.22 | 73.66 | 73.55 | -9.03%.
• VNQ: USD 85.55 | 85.41 | 88.36 | -1.25% (stable real estate trend in the US). 
• GLD: USD 189 | 190 | 191.17 | +0.52% (Gold valuations are on the high end).

Sentiment indicators have normalized from euphoria territory, while investor positioning shows a balance between investors betting on a market rally (strong Bull Market) versus those bracing for a correction. Global bonds are underperforming equities, ending the month in the red as guidance from major central banks poured cold water on the idea that interest rate cuts might be delivered this quarter.

Looking at global economic indicators, despite geopolitical risks, there is room for optimism in financial markets. Regardless of rather expensive asset prices, I keep buying, but I do with smaller and less frequent purchases, while keeping a well diversified portfolio. 

SWEAT YOUR ASSETS QUOTES

• Decisions. I think about decisions in three ways: hats, haircuts, and tattoos. Most decisions are like hats. Try one and if you don’t like it, put it back and try another. The cost of a mistake is low, so move quickly and try a bunch of hats. Some decisions are like haircuts. You can fix a bad one, but it won’t be quick and you might feel foolish for awhile. That said, don't be scared of a bad haircut. Trying something new is usually a risk worth taking. If it doesn't work out, by this time next year you will have moved on and so will everyone else. A few decisions are like tattoos. Some mistakes are irreversible. Once you make them, you have to live with them. James Clear
• AI. You are focusing too much on the dangers of artificial intelligence and not enough on those of natural stupidity. Anonym
• Climate. If the climate were a bank, rich countries would have already saved it. Anonym

SWEAT YOUR ASSETS PODCASTS

Check out my latest Podcast Episodes on your favorite Players. 

Until next month...Keep it Real and Sweat Your Assets.

Alessandro BARONI

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