Investors, NOW is Your Opportunity!
"Be greedy when others are fearful" - Warren Buffett
The Market Falls, the Pheonix Rises
Last week, we discussed September as the worst month for market returns, which is called the September Effect. But it seems to be on steroids in 2024.
No matter what angle you examine the markets, they look bad.
Economic data reports fueled the fire this September, and all three major U.S. indexes went up in flames.
Here are the numbers from last week:
S&P 500: fell more than 200 points, ending the week with a -4.2% loss
NASDAQ: slid more than 950 points to end the week’s session at -5.8%
Dow Jones: lost more than 1,000 points and ended the week negative, at -2.9%
Thankfully, opportunities are rising from the ashes.
One of the best times to invest is when markets are down. That’s when stocks are the least expensive, and stable companies will likely return to their highs when the market increases.
With that said, based on last week’s performance, here’s a list of opportunities in the market:
Amazon: -0.7%
Alphabet (classes A and C): -7%
Meta: -4.16%
Nvidia: -13.9%
Broadcom: -14.9%
Advanced Micro Devices: -8.9%
VanEck Semiconductor ETF (SMH): -11.3%
No New Jobs, No New Money
What is the U.S. Jobs Report?
It summarizes the number of people on last month’s payroll (who’s working), their average earnings, and the rate of change in unemployment (who’s not working).
A new report is released every month, and last Friday, we got the August report — it’s not looking good.
The government expected employers to add 165,000 new jobs to the U.S. labor market. The official number was 23,000 jobs short, at 142,000. That affects your money in several ways:
Leverage: when more job seekers are looking for work than there are jobs on the market, employed workers stop quitting and stay with their employers. So, employers gain the upper hand in the labor market. Unfortunately, that’s when workers and job seekers lose the leverage to negotiate for increased salaries.
Investments: When unemployment is high, businesses selling services and goods tend to slow down. When businesses slow down, investors don’t invest as much as they once did.
Debt: Debt-heavy businesses and unemployed workers' disposable income will often go *poof, and their risk of acquiring more debt could increase.
The Federal Reserve knows that, so it’s planning to lower interest rates to address it.
The question is, when?
The next Fed meeting is scheduled for September 17-18. Investors and economists expect the Fed to lower interest rates at that meeting.
This is one of the most important decisions of the year. Investors, banks, and other businesses will react, and a snowball that size could affect all corners of our financial system.
Brace yourself for what happens on the 17th.
Don’t let Unemployment Destroy Your Bag
In 2023, my wife lost her marketing job while pregnant with our first son.
Ten days later, I lost my executive position as the metaverse crumbled, and my startup quickly pivoted from a 3-year project to a new direction.
Within two weeks, we went from a thriving income to practically $0.
But that experience didn’t break us. Stepping away from the everyday hustle actually reduced stress and helped us lean into the experience of preparing for our first child.
Almost a year has passed since then, and still, we essentially live on invested income and savings.
For many others caught in the corporate shake-up of 2023, their stories aren’t the same. They sold homes, cars, and made other sacrifices to stay afloat.
As unemployment rises again, I want to help you prepare your finances like my wife and I prepared ours.
Here’s what you can do to prepare for whatever 2024 or 2025 might bring (or for that long-awaited moment you decide to quit your job):
Prepare a budget and live below your means, always! You cannot invest if you don’t have money at the end of each month. I wrote a step-by-step guide to build your budget if you need help.
Save your money consistently and predictably! Choose a monthly savings goal, and never make an excuse to skip a month. Don’t be afraid to start small if you need to.
Compound your savings by moving it to a high-yield account, which offers more interest than traditional banks. I’ve had two domestic and two overseas accounts. My favorite is Marcus by Goldman Sachs (referral code at the bottom of the page).
Invest in low-cost assets with positive returns. I recommend ETFs to new investors. These low-cost assets allow you to buy more with smaller budgets and increase profits.
Repeat those steps over and over again.
Those steps are your initial roadmap to financial success.
Tools and Resources
Need a FREE budget tracker?
Need to open a High-Yield savings account?
Click here for my referral code to Marcus by Goldman Sachs. Use it for an extra +0.25% cash bonus on your money for 3 months.
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