Market Summary 20th September 2023

The stock market is currently in a downturn, with significant drops happening again after a major announcement from Mr. Powell, a key figure at the Federal Reserve. The QQQ, Dow Jones, and JNK ETF, all different groups of stocks, are showing lower values than their growth trend in 2023. This decline is worrisome because it suggests companies will have a harder time and are valued less. It seems like the delayed effects of the Federal Reserve's decisions are starting to show and investors are losing faith in a smooth resolution if the Federal Reserve continues its strict approach.

For growth investors, people who invest in companies expected to grow at an above-average rate compared to other companies, this scenario is actually a good thing. It sounds strange, but experiencing a bear market, where prices are falling and selling is extensive, is not what scares us; we usually see it coming from far away and prepare for it, avoiding massive losses. A big fear is a choppy market, one that is very unstable and doesn’t settle, just like in 2023.

Being in a position where we've converted all our investments to cash and seeing other investors start to follow the strict approach by the Federal Reserve is good. This will quicken the time we spend in this unstable "choppy" market situation and allow us to start afresh. A good scenario for cash investors would be to quickly reach the market bottom to start anew. This scenario will also help balance inflation and allow the Federal Reserve to be more supportive of financial markets again. I may not fully support every decision by the Federal Reserve, but as long as they are here, I'd prefer to have them on my side.