September Mourn
Hello everyone, and welcome back to the boodle blog, where we give our insight on what is happening in the stock market based on our research and years of investing in up and down markets.
Here at Boodle, we believe the person best qualified to manage your portfolio is you, and we serve as a kind of guide to hopefully add value to your holdings as you grow your investing knowledge.
This month's blog title was borrowed from the great singer, Neil Diamond, and we feel that based on what happened in August, and the fact that September has been historically challenging for investors, that title sums up the month ahead.
For the month of August, the Dow fell by 4.10%, the S&P 500 by at 4.2%, and the NASDAQ joined those 2 indexes with a 4.6% loss.
Year to date, all 3 indexes are down, and the negative pattern in stocks that greeted us at the start of 2022 remains entrenched.
Our unenthusiastic view of the markets that we have held since February remains in place. There are several mitigating factors that remain stubbornly in place, and we don't see much relief for the retail (us) investor. Let's go over some of those roadblocks with you now. Inflation eased a bit from a peak of 9.1% to 8.5% - still historically high, so for us here at Boodle, we expect to see another interest rate hike in September.
The Federal Reserve is determined to reduce inflation, and our estimate, based on our research is a Fed inflation rate level in a range of between 3.5% and 4.5% by the end of 2022. This should give you an idea of interest rate hikes in order to achieve that 3.5% number. We are about 10 weeks away from the midterm election, and we stand by our prediction of a Republican House victory, and a too-close-to call Senate Republican victory.
September 30 also marks the end to the third quarter, Q3. Corporate earnings will be reported for Q3 and we think these earnings will mirror the first two quarters of earnings. If something stands out about the earnings reports, we will report the news in a future blog.
Our long-standing view on not buying new stocks or funds but keep dollar-cost-averaging into your retirement portfolio remains in place. We continue to be vigilant on a buying opportunity into the market sometime in 2022. These situations are difficult to identify and require patience from everyone, however, should such an opportunity present itself, then we would expect to see the S&P 500 challenge the 5000 point range. Currently it sits at 3924 as we go to press.
Here at Boodle, we understand and sympathize with investors and the challenges we all face in 2022. We look forward to seeing you back here next month, thank you for choosing Boodle for insight into the markets that you won't find any place else.