U.S. stock market indices --how much longer can they rise?
U.S. stock market indices--how much longer can they rise? What should investors with concerns about high valuations or those who have stayed on the sidelines do?
In the past few days, many friends around me have privately inquired whether the U.S. stock market indices are nearing their peak. In 2024, let me provide a response and also summarize the events of 2023.
Among my friends this year, there are two main states:
The first group is cautious, believing that global risks have not been resolved. They are holding onto cash or fixed deposits.
The second group is fully invested in U.S. stocks, $Nasdaq(NDAQ.US$ having identified crucial turning points.
In summary, these scenarios have unfolded in 2023, and those with more than 5 years of investment experience should be reminded to be responsible for their money. If you can identify macro changes this year, your returns should at least be positive.
Let's first summarize the trading logic of the stock market in 2023:
Throughout the year, asset pricing revolved around two main trading logics:
Where is the peak of global high-interest rates? (The December Federal Reserve interest rate meeting has provided an answer.) $U.S. 10-Year Treasury Notes Yield(US10Y.BD$
If the global growth engine stalls, what will support future growth? (Still seeking an answer)
Clarifying these two questions fundamentally helps in understanding the present and the future.
Review of 2023:
The main events in 2023, from Lincoln's visit to China in May, Yellen's visit, APEC meetings, to the agreement reached between the major players and the subsequent bull market in stocks, have been influenced by various factors. The three major U.S. indices, driven by fiscal issuance in 2021-2022, initially held up until October 2023. From October 2023, the logic of trading on loose currency began, creating a series of rallies. Many friends who stayed on the sidelines might now regret not participating, especially those who understood the logic but did not act accordingly.
After summarizing gains and losses in 2023, let's not dwell too much on them.
Looking ahead to 2024, the global growth engine is currently not running at full capacity. Still, the U.S. economic data shows high resilience. In the coming year, trading opportunities lie in timing the rebound and its sustainability.
As for the 2024 U.S. stock market indices, the current main logic revolves around the expected easing of currency interest rates. Many experts have provided detailed plans. Pay attention to expectations regarding monetary policy. Thus, 2024 might see significant volatility with an upward trend. The key is to watch for signs of the peak in rate-cut expectations, and the rest of the time, follow the strategy.
In response, let's outline a general approach for 2024. Entering the market with a large position can indeed lead to chasing at high levels. Therefore, chasing highs is not the preferred strategy at the moment. Here is a more practical approach:
Keep gradually moving back into a 5% fixed deposit if the U.S. Dollar Index $USD(USDindex.FX$ is below 100, finding risk-free returns.
We won't delve into specific strategies for U.S. stocks in this article, but I will provide periodic reports on performance in the future. Those interested in real-time strategies can follow me.
The strategy for IPOs in 2024 will also focus on the U.S. stock market. Those interested can follow me for updates.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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