How I'm Investing In 2024
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- Опубликовано: 14 окт 2024
- I discuss my current investing outlook for 2024 and planning to be more aggressive in stocks. Add me on Instagram: michellemarki
I reflect on the investing decisions I made in 2023 and how I'm planning to make better decisions in my investment portfolio in 2024 by being less defensive.
Though the S&P 500 returned 26% including dividends last year, the stock market appears to still be overvalued. Berkshire Hathaway led by Warren Buffett is still sitting on over $157 billion, which is about 20% of Berkshire's market cap.
I'm rueful of sitting more on the sidelines last year with having kept more cash in high yield bank accounts giving me 5% rather than aggressively investing in stocks like Berkshire Hathaway and Apple, though I bought some last year.
On January 31, the Federal Reserve's Jerome Powell indicated that the Fed Funds Rate (which dictates a lot of interest rates that banks and mortgage lenders use) would remain unchanged at the current range of 5.25-5.5%.
Consequently, the stock market tumbled in reaction to the news that rates would not be cut yet. Though inflation has come down significantly, the Personal Consumption Expenditures (PCE) inflation index was still at 2.9% as of December 2023. Good news, however, is the US economy grew at a real GDP growth rate of 3.1% with a strong labor market and high consumer spending.
In order for the Fed to cut interest rates, they would need to see PCE inflation at a more "sustainable" 2%. If I had to take a wild guess, perhaps the Fed might cut the first quarter rate by summer 2024 if PCE inflation hovers around 2% by then.
But that would be a tall order, and some people are guessing there may possibly be three rate cuts in 2024 to end up in the range of 4.5-4.75%. Presumably the stock market may jump if the Fed starts cutting rates enough.
Despite this macro picture, as investors we should focus on doing fundamental analysis on companies we're interested in.
Reflecting on one of my favorite investors, the late Charlie Munger said in his last Wall Street Journal (WSJ) interview in November 2023 that it's going to be tough.
Charlie Munger advised that most people should just be in index funds, though maybe we might want to consider some of the Apples and Googles since significant market gains are coming from these few super competitors or big winners.
Perhaps we may want to consider investing in some of the "Magnificent 7": Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), Amazon (AMZN), Nvidia (NVDA), Facebook/Meta (META), Tesla (TSLA).
Or now that Tesla's market cap fell below $600B after having once been at over $1T, perhaps Berkshire Hathaway should be considered part of the Magnificent 8.
So I'm considering following what Charlie Munger has advised and increasing my stock purchases on a more frequent basis than only taking chunks of money at a time and buying some stock I think is especially on sale at a given moment.
Recently WSJ Columnist Jason Zweig suggested investors write a letter to their future selves detailing our plans, why it makes sense, and what results we foresee. By writing it down, this can help us stay more level-headed when we may see scary news headlines and we resist the temptation to change our portfolio allocations. Hopefully we regret less and sleep well at night!
I hope my video "letter to my future self" is helpful as you consider what is best for your portfolio too!
As long as you stay true to yourself, your plan, and your investing temperament, that's the best you can hope for no matter what happens in the stock market.
If you're interested in learning how to take control of your finances and start becoming an investor like Warren Buffett, check out my free PDF guide: michellemarki....
I look forward to making more investor friends! Please like and subscribe if you learned something or enjoyed my video. Thank you! :)
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Disclaimers: This content is for entertainment, information, education purposes only. Michelle is not a financial advisor and is not providing financial, investment, trading, tax advice, or recommendations. Please consult with a professional financial advisor with a fiduciary duty and responsibility if you need help in your situation. All trademarks, logos, and brand names belong to their respective owners.
I like the concept of writing a letter to our future self. Or video!! 😂😂😂
Thank you!! Hope that helps you too!! :D
@@MichelleMarki. 😊
Hey Michelle, glad to hear your thoughts on the 2024 investing style. In my opinion, 2-3 rate cuts seems to be a possibility this year especially after today's hotter than expected CPI. Glad to her you are investing in Apple 🍎 ☺. Let me know if you are open to another collab, I'll DM you.
Hey Kaye, how have you been?! Hope all is well! I'm not sure how much the Fed factors in CPI, but I'm guessing if the PCE remains stubborn (and not trending faster down to 2%), maybe they'll still do the 2-3 rate cuts but later in the year rather than starting in the summer. Who knows! And yes I would love to do another collab with you!! Lets catch up soon my friend! :D
It is a long game... no one can time the market except insiders and Past Performance is not indicative of future results... and well technical Analysis has been replace with Behavioral Finance....Glad to hear your thoughts...Many times with your high yield savings account Compound Interest is better than Compound Growth.. The first cannot be taken away the second can.
Thank you Victor for sharing your wisdom and insights! I agree past performance isn't indicative of future results. However, maybe if I push myself somewhat beyond the limits of doing valuation calculations (often arriving at the conclusion that many stocks are too expensive), I might do well to take a bit more of a leap of faith into proven stalwarts. I like your encouraging note about compound interest being one's to keep vs compound growth that may be present in paper gains for the time being. Tesla is a cautionary tale in that regard. And even those who may have invested in Microsoft at its top in 2000 had to wait many years to break even. So nothing is promised! :)
Thanks for the video!
For 2024, I will continue putting money into credit cards: AMEX, Mastercard and Visa. So far, my dividend returns and the share values have done nothing but go up for me since 2020.
As far as Tech, NVIDIA has been my best stock since 2015 and it's dragged everything else connected to it upwards. Intel, Micron, AMD, TSM, SMCI, Google, Amazon, etc.
I'm going to continue to buy shares in Micron, AMD and TSM.
I'll also buy more Walmart as they split. Definitely worth owning.
Wow, that is incredible how well the credit card companies have rewarded you as a shareholder (above and beyond their normal consumer rewards)!!! It's a great idea, I will look more into Visa as I tend to use them more. You've just demonstrated how awesome of an investor you are by holding NVIDIA since 2015, I am super happy for your success! 👏 You inspire me to be more like you. It def seems like a tailwind whenever companies split, and if Walmart's split is mainly meant to give their employees more of a participation opportunity, then that has to be a good sign for the stock! Thanks for sharing Jon!!
Hi Michelle, BRK.B is my largest holding and really like Broadcom (AVGO). Also I have just retired. Hope to see you at the annual shareholders meeting in Omaha! 👍…
Congratulations Norman on your retirement! Glad to hear about your stock interests! Sadly I don't think I'll be able to make it out this year. I hope you have a wonderful time! :D
Hi investor friend! Very sorry about Charlie. I know you are a fan!
Thanks, I miss Charlie, he was like another Grandpa I wish I had!
Wow nice to hear from you after a long time. BTW MKL dropped today. Good opportunity.
Thank you kindly! Ahh interesting, thanks for letting me know about Markel's drop! :)
21:44 MICHELLE SHOUTED ME OUT!!!
"M.AN.G.O.A.T"
Microsoft, Apple, Nvidia, Google, Oil (oil and gas stocks with Dividends), Amazon, Tesla
Add: Micron, AMD, TSM, Intel and a few others.
Aww, thank you for watching my whole video, it means a lot to me!! Your shout out is well deserved!! Thank you for sharing the stocks you own. How do you feel about Tesla's direction these days?
@@MichelleMarki When you are a consumer from these companies, you understand them better.
TESLA has the best charging network in America and they'll be opening it up to 3rd party EV soon. They also have a more affordable model "2" coming soon.
The Model 3 and Model Y are the best selling EV models in the world.
I say Tesla is still a strong buy - although they were stronger years ago before the competition arrived (pre-split). I will continue to hold.
@@PassportBrosBusinessClass Compelling points, thanks for these insights! I think like Charlie Munger said, never underestimate Elon Musk!
I own shares in Berkshire B, but my main question is, how high will it go? I need it to do what Berkshire A did and I need it to do so over the next 10 years. I'll just hold and wait.
I think Buffett probably expects Berkshire should be able to average 10% a year, which is respectable but not too ambitious. Do you wish it would become as big as Berkshire A? I also would hold forever personally.
@@MichelleMarki If my Berkshire B did as well as A did, I'd be a multi millionaire in 10 years instead of just having to use my real estate to inflate my net worth!
Oh yes ABSOLUTELY!!!
@@PassportBrosBusinessClass Haha you may need to rely on your tech growth stocks to become a multimillionaire! BRKB has a long ways to go, maybe another 80 years before it might become like BRKA XD
My portfolio went down massively due to baba and Prosus. I was luckily able to double my retirement fund by getting into Alpha Metallurgical Resources when Monish Pabrai did. Overall though I don't think I outperformed the s&p. Right now I'm bullish on energy commodities for the next decade and building my portfolio around that.
Here's a question:
What possessed you to buy Alibaba when the Chinese economy is in a tailspin?
I bought Alibaba at $86 back in 2015 and rode it to $300 before hitting the sell button. Once I saw Chinese stocks take a hit under the HFCAA act, I stayed far away.
Thank you for sharing, sorry to hear your portfolio went down for the time being but hopefully it will recover in due time. That's awesome you were able to get into Alpha Metallurgical Resources, good for you! I didn't even have the latest of Mohnish's activities in mind, so I'm happy for you. Do you like more niche or midcap players in the energy commodities or are you into some of the larger cap ones Berkshire has bought in recent years?
@PassportBrosBusinessClass, back in 2021 Alibaba seemed more promising with Charlie, Mohnish, Guy, and others jumping into it. I would guess Chinese big tech will eventually recover in some years, but while the Chinese economy is hurting, it may look unattractive. The HFCAA Act is definitely a concern, and more so because of the US's threat to delist. I'm assuming China still wants foreign direct investment, so it serves no one's economic interest the more they play this tit for tat stuff.
What are you investing in for 2024? Any specific stocks you like?
Hi Guillermo, I might stick to many of the usual big tech, but also Berkshire, DJCO, and as another RUclipsr Friend reminded me, Visa. Those seem potentially worthwhile. I wish Costco would go on sale but it seems pricey :/
There are some people expecting rate cuts and some people expecting a housing crash.
I DON'T SEE EITHER HAPPENING.
So long as America is still at odds with China and Russia, don't expect any rate cuts.
Rate cuts would cause a reverse market crash in housing.
When people think "lower rates", they think about 3% and 4% - what they were used to between 2016 and 2020. Those days probably aren't coming back short of an absolute catastrophe.
Many people have perfect mortgages from 2020. 3% fixed for 15, 20 or 30 years. Their payments are low compared to what exists at higher loan amounts now. Those people won't sell. Their homes are assets. They can't really buy either unless they're on fixed income since interest rates and home values are sky high.
Thank you for these insights, I agree it is unlikely for mortgage rates to get back to the "perfect" rates of 3-4% anytime soon -- probably not for some years. I agree people won't sell their homes with great rates unless they have to. Though I could see the Fed gradually reducing rates barring some economic crisis to make them expedite them back to zero. As a saver, I hope banks will continue to give at least 4-5% so long as the Fed doesn't cut (much). Some of the few straws (significant problems) that could maybe break the camel's back (the economy), though not posing as obvious systemic issues currently: corporate debt imploding, a Middle Eastern war that ropes in the US, or consumers loaded with credit card and other debt lose their jobs and can't afford stuff.
@@MichelleMarki
A middle East conflict will drive up gas prices. I just got an electric car - I'm READY!
3-4% interest rates created inflation. I doubt we'll see those again anytime soon, but I think it's important to note, this country has been averaging a massive economic problem almost every 10 years.
2001, 2008, 2020...
I'm not saying it can't happen, I just think a "catastrophe" will be required.
Government cuts rates to trick us into SPENDING MONEY. When people are afraid, they tend to hoard their own money and refuse to spend which drives us into recessions.
The problem is that the debt is so high now it costs more to service the debt than the national defense. The situation is getting worse each passing year.
A catastrophe is coming simply because it must be coming.
The question you should ask yourself: are you ready to buy property when/ if interest rates drop again?
Real Estate is the only true hedge against inflation now.
These stocks are just temporary pleasures.
Like # 14
Gracias!!
How did you do in 2023? You say you are disappointed? Why?
I had mediocre returns overall, close to 5% returns given I stayed more in cash
@@MichelleMarki. Ouch 😓