How I Learned to Outperform the Market.

Since I learned to start with the macro environment, everything changed. I repeat this a lot because it is one of the most important things I can teach you.

The current times are a textbook example of this. Since we entered an environment of slowing growth and inflation in the past weeks, we had to adjust with stable outperformance as a result. 

The historical data showed us we should close our exposure to the tech sector and commodities and get into Consumer Staples, Healthcare, REITS, and Insurance.

While these sectors are not the most exciting, they are the places to be when inflation and growth slow simultaneously. It was not different this time, with these four sectors returning 2.5%, while the S&P 500 only returned 1.5%.

 Going Forward
Most investors want their bubbles back! Judging off what Jerome Powell, the Chair of the Federal Reserve, signaled they might be getting just that.
 
The central bank will likely cut interest rates next month, marking a shift more than two and a half years after it began raising borrowing costs to combat inflation driven by the pandemic.

 At the annual Jackson Hole, Wyoming conference, Powell stated, “The time has come for policy to adjust,” indicating that the Federal Reserve is ready to change course. 

Powell and his colleagues, who have maintained higher rates for an extended period, are now facing the delicate task of balancing the continued slowdown of inflation with the need to protect the U.S. job market. 

With the market anticipating a rate cut in September, Powell's comments did not significantly impact market movements. He also acknowledged, with a hint of nervous laughter, that he had been mistaken in initially considering inflation as transitory.

 As the leading indicators show, inflation is set to reaccelerate, and their interest rate will start to impact the market.

If you want to learn how to prepare for this with a stable Macro Portfolio, click to join my Program for Free.