Sweat Your Assets Monthly Digest - January 2024

Hi ,

I trust you had a great start in 2024. January is named after the Roman god Janus, who had two faces, one looking forward and one backward. 

Slightly inspired by this Roman reference, I refreshed the Logo of the Platform. Let me know if you like it! It is truly taking a "soldier-on" stoic twist.  

While preparing for the coming months, let me indulge in high-level snapshots of the last 12 months of the S&P500. 

The S&P500 had a gear year (+22.65%), hitting new historical records in January 2024 (4,927.93) on January 29th. 

Let's now look at the most-performing stock in the S&P500 in the last 12 months. We can clearly spot the Green areas in the graph below, where the magnificent 7 had had the lion's share: Apple, Microsoft, Google (Alphabet), Amazon, Nvidia, Meta Platforms and Tesla.  

MARKET BAROMETER

An eye view of Stock Market Indicators, as of February 2, 2024:

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

• VIX (volatility index) - the fear gauge: 13.83 | 12.45 | 12.65 | -12.89% (Fear perception is slightly growing).
• US Fed Funds Rates: 5.33
• ECB Interest Rates: 4.5 
• S&P 500: 4,906 | 4,769 | 4,554 | + 81.18% (Record High).
• S&P 500 P/E Ratio: 26.63 | 26.43 | 25.17  (Historically, the median value is 17.86, with a typical range between 19.33 and 27.91. We are now getting closer to the high end of the P/E Ratio ranges). 
• BND: USD 73.66 | 73.55 | 71.29 | -7.83%.
• VNQ: USD 85.41 | 88.36 | 80.58 | +1.53% (positive real estate trend in the US). 
• GLD: USD 190 | 191.17 | 189.26 | +53% (Gold valuations are on the high end).

US Federal Reserve Chair Jerome Powell recently said "he would like investors to  treat good news as good news." "We look at a strong growth; we don't look at it as a problem." I think it is a good way to look at the US economy and overall financial market right now.  Sure, we cannot overlook the fact of a record-high US Government Debt, which Nassim Taleb stated, "eventually you will have a Debt Spiral," "and a debt spiral is like a death Spiral." This is a structural macro trend to be aware of. It is the elephant in the room.  

Overall, if you had a good run in 2023 by being invested in the market, congratulations. Still, it is essential to be humble and ..."never confuse a bull market with brains." 

Personally,  I had a good year out of a no-brainer, well-diversified, long-term investment strategy. Nothing fancy: just old-school financial discipline. 

QUOTES

• Invest in preparedness, not in prediction. Nassim Nicholas Taleb
• Facts don't care about your feelings. Ben Shapiro
• Disappointment is a hot burning fuel. Let it light your fire to become better." James Clear

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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