Sweat Your Assets Monthly Digest - September 2024

1. Quotes of the Month
2. Latest Posts
3. Market Barometer
4. Podcast

1) SWEAT YOUR ASSETS - QUOTES OF THE MONTH

• Diversification. "Diversification is a safety factor that is essential because we should be humble enough to admit we can be wrong." John Templeton 
• Lifestyle. "If I had 100 million, I would nevertheless walk around in old clothes because the knowledge of it, my consciousness of my wealth, would suffice"  Fyodor Dostoevsky (The Adolescent)
• On Learning. “Intelligent individuals learn from every thing and every one; average people, from their experiences. The stupid already have all the answers.” Socrates

3) MARKET BAROMETER - September 2024

An eye view of Stock Market Indicators:

• US Fed Interest Rates: 4.75 - 5

Changes! (trading economics). On September 18th, the Fed decided to lower interest rates by half a percentage point, between 4.75% and 5% (previously it was 5.25-5.50). As the first cut by America´s central bank since it lifted rates to control inflation, the shift marks the start of a monetary-easing cycle. It could be seen as a bold bet, given that inflation is not precisely yesterday´s story, but the Fed is confident it is on track to bring inflation under control. 

• ECB Interest Rates: 3.65-3-90 

Changes (European Central Bank)​​. On the 12th of September ECB decided to lower the deposit faclity rate (DFR) - the rate through wich ECB steers the monetary policy stance - by 25 basis points (from 3.75 to 3.5). The interest rates on the main refinancing operations and the marginal lending facility will be decreased to 3.65% ande 3.90% respectively. "Based on our assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission, our confidence in a timely return of inflation to target is supported by declining uncertainty around our projections, including their stability across projection rounds, and by inflation expectations across a range of indicators that remain aligned with a timely convergence to target​". 

• My Key Indicators:

Comment: September, historically the worst month for stocks, has been a pleasant surprise this year. Thanks to the Fed´s pivot to rate cuts, the S&P500 is up 3.78% this month (YTD +19.15%). It notched its best year-to-date performance at September´s end since 1997 and the best Quarter since the 4th quarter of 2021. On top of everything, it reached new all-time records!  In practical terms, all these records don´t mean much. It is crucial to realize the market is "hot." From a statistical and historical point of view,  there are increasing chances of future corrections and "returns to the mean." 

From my small "stock picking" portfolio, I am positively surprised by the performance of Iron Mountain Inc (data center) (YTD +70%). Given the macro trends in data centers, it will continue performing well. I plan to write a post about it. Stay tuned!  Another stock I own with a positive performance was INVESTOR AB (YTD +32.56%). 

Until next month, 

SWEAT YOUR ASSETS

Alessandro Baroni

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