Premier Wealth Financial Services ’s Post

“The stock market is the only market where things go on sale and all the customers run out of the store.” Cullen Roche   We all were jittery about the remarkable returns we have seen in the small cap recently but it is tough to call out the top in the bull market. We all knew that the situation seems too good to be sustainable. The exorbitant valuations unsettled the market veterans.   At last, SEBI issued a caution regarding the frothy valuations in small-cap stocks and mandated AMCs to conduct stress tests in the event of a significant downturn. By implementing limitations on new investments in small-cap funds, SEBI effectively cut off the source of fuel that had been propelling the exaggerated valuations in this sector. Consequently, we are witnessing a substantial correction in these stocks amidst the broader market downturn.   When the market is doing well and our investments are growing, it feels like everything is perfect. We might even think that this good run will last forever. The recency bias tricks our brains into believing that what's happening now will keep happening.   So, when experts suggest adjusting our investments to balance risks, we might not want to listen. After all, our portfolio is doing great, so why change anything? But that's exactly when we should pay attention.   Then, when the market suddenly takes a turn for the worse, we panic. Loss aversion bias kicks in, making us afraid of losing what we've gained. Even if the losses are small in the overall portfolio, we're scared to make changes because we don't want to feel like we've lost anything.   By the time we finally decide to reassess our investments, it's often too late. The market has already shifted, and we've missed the chance to make adjustments. If only we'd stuck to our asset allocation and balanced our investments earlier, we might have had some extra money to take advantage of correction.   It's a frustrating cycle, but it happens to all of us. Our brains have a way of tricking us into ignoring the fundamentals of investing when everything seems fine. This is where finance professionals can add tremendous value. By providing objective advice and guiding clients through market fluctuations, they help take the emotion out of investments and keep clients informed. #assetallocation #portfolioreview #investing

Think stock valuations are overextended? We show different approaches to get the whole story. Perhaps they’re not as pricey as they seem. Catch our #WeeklyMarketCommentary → https://bit.ly/49heEKs

This week’s Weekly Market Commentary discusses how the recent eight-day winning streak in the stock market has shifted the narrative from correction to comeback, with the S&P 500 challenging key resistance at 4,400. However, market breadth and 10-year Treasury yields, could impact the sustainability of the market's advance and its upside momentum.

After the S&P 500’s 26% return last year and this year’s strong start, many investors are worried. But should they be? Since 1925, the S&P 500: -Up 73% of rolling 12-month periods -Up 88% of rolling 5-year periods -Up 94.5% across 10-year periods Over the 98 year stretch (1925-2023): -Stocks gained more than 20% in 37 of 98 years, which is the most frequent result -Stocks gained between 0-20% in 35 of 98 years, second most frequent "Volatility" of the market is short-term. Be a long-term investor!

In our recent conversations with institutional investors, many have recently shared with us their concern that earnings expectations are too optimistic. Full year 2024 S&P 500 consensus bottom-up earnings estimates are essentially the same today as they were in the summer of 2023, at $244 per share. While there is clearly concern that an eroding economy could cause downward revisions, optimistic investors can rightly point to companies where Q1 estimates have been lowered, but full year 2024 guidance has not been reduced. This in effect creates an “implied” 2H of 2024 guidance that is perhaps excessively optimistic. It is quite obviously true that the stock market can appreciate even while there are aggregate downward revisions. But, even in an environment of aggregate downward revisions, relative estimate achievability matters. At the sector level, we noticed contradictory trends – please reach out to sales@trivariateresearch.com for further context on this topic. #investing #markets #equities #stocks Adam Parker

In this week's #StifelSightLines, we discuss the potential for both a bond market and stock market rotation and why some actions may be warranted, while other actions may not.

𝗥𝗲𝗰𝗲𝗻𝘁 𝗚𝗹𝗼𝗯𝗮𝗹 𝗙𝗼𝗿𝘄𝗮𝗿𝗱 𝗣/𝗘 𝗥𝗮𝘁𝗶𝗼𝘀 🔍 What is the Forward P/E Ratio? The Forward P/E Ratio is a vital financial metric that helps investors evaluate a company's stock price relative to its projected earnings over the next 12 months. It’s calculated by dividing the current share price by the estimated future earnings per share (EPS). In our example, this refers to all shares of a country. 📊 What Does It Tell Us? Growth Expectations: A higher forward P/E indicates that investors are expecting significant future earnings growth. Valuation Insight: Offers a perspective on how much investors are willing to pay today for the company’s expected future earnings. Relative Value: Enables comparison between companies, highlighting potentially overvalued or undervalued stocks based on future projections. ⚠️ Limitations: Estimate Reliability: The accuracy of the forward P/E depends on the reliability of analysts' earnings forecasts. Market Conditions: It does not reflect broader market trends or investor sentiment that could influence stock prices. Earnings Quality: Forward P/E doesn't assess the quality or sustainability of the expected earnings. 💡 Why It Matters: For savvy investors, understanding the forward P/E ratio can provide valuable insights into market expectations and help identify investment opportunities. However, it's essential to consider it alongside other financial metrics and qualitative factors to make informed decisions. www.joerg-mayr.com #Investing #Finance #StockMarket #ForwardPE #InvestmentStrategy #FinancialMetrics Source Picture: https://lnkd.in/dBsVzDGB

In this week's #StifelSightLines, we discuss the potential for both a bond market and stock market rotation and why some actions may be warranted, while other actions may not.

In this week's #StifelSightLines, we discuss the potential for both a bond market and stock market rotation and why some actions may be warranted, while other actions may not.

In this week's #StifelSightLines, we discuss the potential for both a bond market and stock market rotation and why some actions may be warranted, while other actions may not.