Desla's Weekly Market Update: July 19, 2024

Desla's Weekly Market Update: July 19, 2024 

Market is Broadening and Small/Mid Cap Investments Predicted to Excel

 

The Federal Reserve has provided greater certainty regarding interest rate cuts. After a couple of years of maintaining high interest rates to combat inflation, the U.S. Federal Reserve is likely to begin cutting interest rates at their September meeting. If cuts are implemented, they are anticipated to bring relief to numerous small businesses, consumers, and lower- and middle-income households. Alongside these developments, the market has witnessed significant outperformance in the financial, healthcare, and industrial sectors, as well as in small and mid-cap investments. Conversely, there has been a cooling trend in technology investments, as investors shift their focus towards other sectors.

 

Looking ahead, we believe small and mid-cap investments will outperform large-cap investments, indicating a market broadening outside of just large cap investments and specifically in the technology sector. It is predicted that the sectors that underperformed in the first half of the year will excel in the second half. We are favoring financials, industrials, and small/mid-cap investments. This prediction is assuming that there won’t be any significant economic slowdown in the coming months. However, if there is a slowdown, we aim to maintain our overweight exposure to large-cap companies due to their stronger balance sheets and cash flows.

 

Considering the current market conditions, we would like to highlight our Tactical Growth Investment Strategy. This strategy focuses on quality companies in sectors we believe can perform well. We believe that this investment approach is well-suited to navigate the current market environment. Here are some reasons why the Tactical Growth Strategy is suitable in today’s market:

 

• Diversification: By spreading investments across multiple sectors, the Tactical Growth Strategy aims to reduce risk while enhancing returns.

• Focus on Quality: The strategy prioritizes companies with strong fundamentals, such as solid earnings growth and robust balance sheets.

• Long-term Perspective: Despite short-term market fluctuations, we maintain a long-term view with the Tactical Growth Strategy, focusing on investments that are likely to perform well over time.

 

For personalized investment advice or more details on our strategy, please contact us to learn about how we position our clients in these dynamic markets. Be sure to subscribe to our Insights page to stay updated on our thoughts about market trends and the economy.

 

 

This information is being provided for informational purposes only and is not intended as investment advice. For more information about our services and fees, please consult our Form ADV 2, which is available here: https://adviserinfo.sec.gov/firm/summary/310235 For a list of all recommendations we have made over the past 12 months, please contact us at 515-452-0001.