What is the critical point of this U.S. stock bear market round?
The dollars released by quantitative easing in 2020 and further back in 2008 caused inflation. Now the FED is taking those dollars back by raising interest rates, leading inflation to a reasonable range and ensuring economic growth.
Where does the money go during quantitative easing?
If the money printed by quantitative easing flows into the stock market, which stocks do you prefer to buy? Of course, it is a growth stock with room for imagination and fast performance growth. These stocks rose much more than value stocks during the bull market and fell more during the bear market. Growth stocks have a lot of room for imagination and can tell a story for their high valuation.
Since it is necessary to reevaluate stock prices during the interest rate hike cycle, growth stocks must lead. Therefore, the Nasdaq fell more.
In fact, there is a U.S. ETF that is more valuable than the $Dow Jones Industrial Average(.DJI.US$ , $Ishares Trust Ishares Core High Dividend(HDV.US$ , which has risen by about 6.5% this year. On the contrary, $iShares Semiconductor ETF(SOXX.US$ , an ETF with higher growth and valuation than the Nasdaq index, has fallen by 31% this year, confirming our reasoning.
If the money printed by quantitative easing flows into the stock market, which stocks do you prefer to buy? Of course, it is a growth stock with room for imagination and fast performance growth. These stocks rose much more than value stocks during the bull market and fell more during the bear market. Growth stocks have a lot of room for imagination and can tell a story for their high valuation.
Since it is necessary to reevaluate stock prices during the interest rate hike cycle, growth stocks must lead. Therefore, the Nasdaq fell more.
In fact, there is a U.S. ETF that is more valuable than the $Dow Jones Industrial Average(.DJI.US$ , $Ishares Trust Ishares Core High Dividend(HDV.US$ , which has risen by about 6.5% this year. On the contrary, $iShares Semiconductor ETF(SOXX.US$ , an ETF with higher growth and valuation than the Nasdaq index, has fallen by 31% this year, confirming our reasoning.
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