Portfolio Update. Fed Rate Hike + Debt Ceiling Issues

Hey everyone,

I’m long-term bullish, which means over 10+ years, I think investors who own high-quality ETFs and stocks will do just fine. However, I think the overall return of the market will likely be closer to 5% per year over the next 10 years than the 9% of the last 100+ years simply because the market is currently trading at the high end of its historical average P/E.

The fed is either going to have to keep raising rates to control inflation (bad for stocks) or the economy will weaken significantly and the fed will be forced to lower rates. The market is acting like that would be a good thing, because historically, the market rallies after the fed lowers rates, but I don’t think the market has priced in a true recession yet. The biggest danger is if the fed continues hiking and forces a very deep recession.

At some point, bad economic news is going to actually be bad news for stocks.