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“Know what you own and why you own it” - Peter Lynch
If you are unaware of what you own, how will you know when to sell? Markets sold off this past week due to strong economic data that may force the Federal Reserve to hold off on rate cuts until later in 2025. The tech-heavy Nasdaq fell -2.3%, while the DJIA and S&P 500 fell -1.9% for the week.
A strong nonfarm payroll report on Friday was followed by the highest expectation for inflation since June 2008, at 3.3% for the next 5 years. Markets took this as a concern that the Fed may no longer be looking to cut rates until the end of the year.
As we move into earnings season, it makes sense to take a step back to know the investments that we hold in our portfolio. Looking back to the market performance in 2022, inflation took a toll on many of the “Growth at any price” companies- many of which have not made it back to their All-Time Highs. If inflation comes back to rear its ugly head, we have data in the not-too-recent past to help guide our process.
As we navigate a market filled with uncertainty, understanding what we own and why remains critical to staying grounded and making well-informed investment decisions. As Warren Bufett says: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price”.
We would like to send our thoughts and prayers to all that have been impacted by the wildfires in California.
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