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  • Christian Armbruester

Investors Anonymous



Then it all became clear. Inflation is proving stubborn and the longer interest rates stay at this level, the more damage it does to government, corporate and household budgets. The only saving grace was growth and we piled into the idea that AI is going to save the world, which came crashing down when Nvidia lost 15% last week. Rates and currencies are already back to pre-seven-rate-cuts levels, and if the S&P 500 does the same, it means another 20% of downside from here. 

 

There is also an election coming up for 350 million people to determine the most powerful man in the world. Please note, there are many other elections this year involving some three and a half billion people, but no one seems to care. We are also in the middle of earnings season, and we might very well be on the brink of a global revolt if Amazon keeps playing ads on a Prime membership. What exactly are we as investors to do in a market environment such as this? 

 

At this point, not much. Buying insurance after the horses have left the staples is too expensive and volatility premiums have already doubled. The key is having investments that don’t all go down at the same time, and buying Netflix when it became obvious that we were all going to be stuck in our homes for months on end. Remember, the markets are always like this, there is always some crisis or pending apocalypse. Which is why we get rewarded with an average yearly return of 10.56% for the S&P 500 over the last 100 years.

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