Mister Market seems to have chosen to wear his short sighted glasses. Why do I say this ?
After the FOMC announcement on the 16 June, there were two main information
- Fed retains the short term interest rate near 0%
- Fed marks two rate hikes in 2023, instead of 2024
The longer term view would be to start progressively sell off bubble stocks to their intrinsic value. This would be aligned with the second point above. You can refer to my earlier post here for the full content.
Instead Mr Market choose to wear his shorted sighted glasses and sold off his value stocks instead.
I would interpret this as Mister Market has chosen to continue blowing bubbles 🙂
Of course the above is an observation based on 1 day of post-response. Really, active monitoring is required to see if this behaviour remains over the next few weeks.
At this point in time, I would NOT recommend to buy more bubble stocks further. Instead holding/rebalancing is the name of the game now if you have too many bubble stocks/growth stocks. Start preparing your war chest and explore the world of value stocks
I leave you with one of my favourite quotes from Peter Lynch 🙂