How to Protect Your Portfolio From September Volatility | Editor’s Note: The InvestorPlace offices and customer service department will be closed on Friday, September 1, and Monday, September 4, for the Labor Day holiday. The stock market will also be closed on Monday. Due to the holiday schedule, the next Market 360 article will be published on Tuesday, September 5. We hope you enjoy the long weekend! | | | Dear Reader, The month of August is almost behind us, and I don’t think any of us are disappointed to put the month in the rearview mirror.
August lived up to its reputation of being a volatile month for the stock market, as light trading volume exacerbated investors’ reactions to earnings reports, China’s economic woes, energy prices, economic data reports, inflation, Treasury yields and the Federal Reserve.
The latter has been a pain point for not just August but for the better part of the year. Everyone wants to know if the Fed is finally done raising rates – and whether it will start to cut rates soon.
Well, we might have received our answer at the Kansas City Fed’s annual conference in Jackson Hole, Wyoming, last week.
As I discussed in last Saturday’s Market 360, Fed Chair Jerome Powell spoke last Friday morning. He said, “Although inflation had moved down from its peak … a welcome development … it remains too high.” Powell added, “We are prepared to raise rates further if appropriate and intend to hold policy at a restrictive level until we are confident that inflation is moving substantially down toward our objective.”
Translated from Fedspeak, Powell does not plan to raise key interest rates further. Instead, Powell wants to wait for inflation to meander lower to the Fed’s 2% inflation target before cutting rates. What we need to remember is that as China exports its deflation to the U.S., inflation should start to fall to the Fed’s 2% annual target. This will not only allow the Fed to cut rates in December but also cut rates further in early 2024. Then, as the presidential election approaches, the Fed will want to step out of the spotlight and not be part of the presidential debates.
So, the breadth and power of the stock market should improve as all the uncertainty surrounding the Fed finally shakes out. Unfortunately, though, we likely have at least one more month of volatility before the stock market dramatically improves heading into the seasonally strong time of year.
I’m talking about September.
In today’s Market 360 , I’ll share how the market historically performs in September… and the best way investors can protect their portfolios from the potential volatility. The September Swoon September is a seasonally weak month for the stock market. It’s actually the weakest month of the year, with the S&P 500 declining an average 1.1% in September since 1928.
The Wall Street Journal reports that the S&P 500 has posted gains less than 45% of the time in September. So, whether you call it the “September effect” or “September swoon,” September is simply a tough month for the stock market.
That’s the bad news.
The good news is that my Accelerated Profits Buy List stocks should continue to exhibit relative strength in September just like they did in August.
The last two months – July and August – represent my strongest relative performance compared to the S&P 500 since last October and November. The reality is that my Accelerated Profits service has a diverse portfolio that’s benefiting from several trends, including artificial intelligence (AI), energy, shipping, pharmaceuticals and consumer spending. Find the Stocks That “Zig” and “Zag” And thanks to the Accelerated Profits diverse portfolio, many of my stocks “zigged” while others “zagged” over the past few weeks. For example, when AI stocks fell out of favor, energy stocks emerged as an oasis. Several of my big earnings winners also picked up the slack.
And when energy stocks dipped, many of my AI stocks re-emerged as market leaders.
Now, I don’t choose these stocks at random… I use my revolutionary software Computational Risk-Integrated System for Income Stability, or “C.R.I.S.I.S. Cash” for short. At its core, C.R.I.S.I.S. Cash uses a series of AI algorithms to constantly scour massive amounts of data looking for patterns. Many of these patterns are nonlinear, meaning you’re not going to be able to see them with the naked eye. But the more data you feed it, the more patterns it can spot.
Overall, my C.R.I.S.I.S. Cash system strives to find stocks that “zig” when other stocks “zag.” In other words, on days when one bucket of stocks is falling, another bucket of stocks is rising and picking up the slack. It ensures that you’re properly allocated and fully diversified – and aren’t too overweight in one stock or one industry.
So, while September may be another bumpy month for the stock market, if you have a diversified personal portfolio of my fundamentally superior stocks, you can invest confidently and not worry about all the distractions and seasonal shenanigans.
Speaking of investing confidently… my C.R.I.S.I.S. Cash system just spotted a new stock with major upside potential. I’m releasing the full details – ticker symbol and all – today.
To learn more about my C.R.I.S.I.S. Cash system and how to access the new pick, click here.
(If you are already an Accelerated Profits member, you can log in here.) Sincerely, |
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