Each quarter, Blooming Tree Wealth Management Founder Ryan O’Connell hosts an open Virtual Lunch Webinar for anyone seeking to stay up to date on what’s going on in the market, previewing the upcoming quarter, and to ask questions about investing for retirement or investing in general. On May 11, Ryan hosted the Q2 BTWM Virtual Lunch Webinar after what he described as a turbulent quarter. “What we’ve had is an unsettling, violent market… violently flat,” which Ryan also said is commonly referred to as a “range-bound market.”
The webinar started with a look at the J.P. Morgan Guide to the Markets. The guide showcased the ups and downs of the last year in the S&P 500, which have resulted in a nearly identical price point. On May 17, 2022, the S&P 500 was at 4,088. On May 12, 2023, the S&P 500 closed at 4,124. “We’re flat…and maybe you could argue for good reason,” says Ryan, who pointed out three key issues that have restricted market growth:
- Inflation and how the FED is responding to it.
- Regional banking turmoil
- Debt ceiling debate
These key issues are likely to impact the market on a large scale in the short-term, but their long-term impact is yet to be determined.
What’s Next for Investors?
Ryan encourages investors planning for retirement to “think defense first.” A defensive strategy should include considering wide moat stocks, and companies with healthy and predictable balance sheets. “We’re looking for quality… (companies/industries) that you still have conviction in,” says Ryan. Ryan also says investors should be cautious of being overexposed in several industries, including:
- Financials
- Real estate
- Utilities
- Energy
Over the past decade and a half, the US market has significantly outperformed the international market. However, over the last year, there has been a shift as the US dollar continues to soften. The European market has outperformed the US market, and China could also join that party in 2023. Adding international assets to your portfolio could be a worthwhile move.
If you’re not comfortable with investing in foreign markets, Ryan recommends focusing your attention on maximizing what you’re gaining from domestic stocks with call premiums and dividends.
Additional Notes and Quotes from Ryan:
- “Invest beyond this cycle.”
- “Think defense first here.”
- “Be prepared for some pullbacks.”
- “Expect a 2023 4Q rally”
- “Get as much juice from the orange as you can… Get paid while you wait (for the market to turn around).”
Stay tuned for details on the Q3 BTWM Virtual Lunch Webinar.