Here is the brutal truth about the stock market right now as we come to the end of June…

(I know you may not wanna hear this... but you kinda need too)
YTD the nasdaq $Q & SP500 $VOO have absolutely ripped higher & it's a little too much...
I personally think we are a little disconnected from the fundamentals & the market is about 5 to 10% over valued.
Some single stocks are "worse"
So when we see the market not making a huge move up or even trending down, it should not shock you one bit. Things are a little hot and the market just needs time for EPS to catch up before we can take the next leg higher.
The economy on balance is fine. Unemployment is low. Job growth is ok. Not a lot of layoffs fine.
Interest rates on balance are fine. We’re currently at 3.5% to 3.75%. That’s historically low. All this talk about raising rates because inflation is out of control is largely BS in my opinion. Inflation will take a breather when oil does and the data is laggy. I expect to see more inflation progress in the next few quarters. FYI, Truflation is showing inflation is at about 1.8%. I think this is more accurate vs the government data. So that shows you where where are at in relation to the feds 2% target.
EPS growth is VERY strong overall for the SP500 coming in at over 20% YoY. The average is about 8 to 10% this where the SP500 average annualized return of 10% comes from in the last 50 years. So the market should be going up more now because EPS is driving it.
So really the main concern is valuations being a little hot. If the market were to fall 10% from here, that would be a very normal and healthy correction back to fair value. But what would happen in that dip is social media will be in a complete panic. Me? I’ll be excited as more deals will be popping up. Bring your expectations back to earth.
So the plan remains the same. Buy great companies for less than they are worth and only do options to magnify ultra high confidence plays. Keep ratios in check to be fine in 40%+ market crashes. Always. I expect lots of volatility in the coming years as all major new waves (Ai wave now) bring uncertainty. Keep your pants on and keep emotions in checks there has never been a better time to be an investor!
If you like these write ups, please drop a comment/repost/like & I will do more of these!