12-3-24 What Excessive Leverage Teaches Us
The Real Investment Show Podcast
Release Date: 12/03/2024
2-5-25 If Volatility is Causing Too Much Worry, You Have Too Much Risk
The Real Investment Show Podcast
Markets enjoyed a nice rally Tuesday after Monday's tariff-inspired action, closing right at the 50-DMA. the 20-DMA is about to bullishly cross above the 50-DMA, suggesting markets are still trending, and money flows are still coming into the markets fairly well. Markets today need to hold support at the 50-DMA so they can push onward and upward. If, however, the market closes lower today, watch for a MACD sell signal to be triggered. We're about halfway through the correction from the post-inauguration rally. If the present volatility is weighing on you, then you've got too much risk in...
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2-4-25 Trade War is Over!
The Real Investment Show Podcast
Well that was fast. Over the weekend, President Trump announced tariffs of 25% on both Canada and Mexico, as well as a 10% tariff on China. The announcement of tariffs set the market on its heels Monday morning as media writers quickly pushed narratives about the potential impacts. However, as suggested on the “Real Investment Show” before the market opened on Monday, the best thing to do would be “nothing.” We stated the market’s opening would likely be the worst level of the day, so any “panic selling” of positions early in the morning would likely be a mistake. Early in the...
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2-4-25 Will Markets Rally Back Above the 50-DMA?
The Real Investment Show Podcast
Money flows continue to be positive, despite all the negative headlines and news over the past couple of weeks. Admittedly, this is part of the overall cycle, with markets over bought and now going through a corrective phase. Halfway through a recovery, we're near the trigger point for a short-term sell signal, with only a little downside pressure. A consolidation is not surprising at this juncture. Also, we're midway through earnings season, and next week will see the buy back window open much wider. Markets today will once again flirt with the 20- and 50-DMA; markets need some "muster" to...
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2-3-25 Markets Down in Response to Tariffs
The Real Investment Show Podcast
Markets have been doing "okay" as of late, in a large trading range for past couple of months. Markets will open today below the 20-DMA in a knee-jerk open in response to President Trump's promise over the weekend to impose 25% tariffs on Canada and Mexico. We'll be watching for signs of the market processing the news, and see where things stabilize later in the day. This is a day to Do Nothing, and wait for the dust to settle, just like last Monday. We close to triggering a sell signal. Markets have been in a consolidation range, with no reason to be concerned so long as trading remains...
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1-31-25 Tips & Traps You Need to Know for Tax Season
The Real Investment Show Podcast
Apple's outlook will set the tone for today's market action; the January effect will be set by the end of the day. Rich & Matt discuss tariffs & volatility; Mexico and Canada are targets. Inflation data due today with the PCE report. The FEd's target is still 2%, and there's no reason to lower rates for now. This is forcing markets to shift focus; why a little inflation is a good thing. The US Tax Code can make you cry like Selena Gomez: Rich & Matt discuss inflation-adjusted tax brackets and standard deduction changes; Qualified Charitable Donations, Quarterly estimated tax...
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1-30-25 The Fed Holds Firm
The Real Investment Show Podcast
It's the end of the month, and the determining day for the January Barometer is tomorrow. Markets knee-jerked all over the board following yesterday's Fed announcements to hold firm at current rates. Economic news was not encouraging, with export up, imports down, suggesting the economy is weaker than thought; labor and demand dynamics. There is a lot of speculative money pouring into markets; nobody is buying stocks anymore. It's all in options, which will end badly for many because it's very speculative. Lance recounts the latest reports from Magnificent-7 member companies; Michael explores...
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1-30-25 Why Options Data is Off the Hook
The Real Investment Show Podcast
This has been a week full of headlines, between the Fed meeting and the whole DeepSeek story, lots of panic and concerns were generated. Markets really haven't done a whole lot this week. Retail investors bought heavily into Monday's dip. But nobody really buys stocks anymore: Retail investors are piling into options at a pace not seen before. Most of the options are call options; investors are fully long on this market. FOMO is now a function of not missing the bottom. A lot of the money being put into the markets is very speculative, and that's not something many will survive on a sharp...
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1-29-25 Watching the Mega-Cap Earnings Parade
The Real Investment Show Podcast
Today is Mega-cap earnings Day, and there's also a lot of economic data to be revealed. Plus, this afternoon will see the latest announcement from the Federal Reserve. Expectations are for the Fed to hold firm on rates this time. Interestingly, despite Monday's selloff, money flows have continued to come into the markets. In fact, on Tuesday (1/28) the QQQ had its biggest inflow since 2021. Monday's market action was NOT the watershed event the bears were trying to make it out to be. Markets are not overbought yet; we're still on a solid buy signal. That's not to say a pullback can't...
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1-29-25 What Money Flows Are Telling Us
The Real Investment Show Podcast
When money flows are positive, asset prices are supported; if money flows are negative, support is taken away. Understanding in which direction money flows are going will help you better determine where markets are going next. Interestingly, despite Monday's selloff, money flows have continued to come into the markets. In fact, on Tuesday (1/28) the QQQ had its biggest inflow since 2021. Monday's market action was NOT the watershed event the bears were trying to make it out to be. Markets are not overbought yet; we're still on a solid buy signal. That's not to say a pullback can't happen;...
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1-28-25 The DeepSeek Knee Jerk
The Real Investment Show Podcast
The race is on for dominance in the artificial intelligence arena with China's release of DeepSeek. Markets initially nose-dived Monday, but ended up slightly higher (with the exception of Nvidia). This volatility underlines the necessity for portfolio diversification. The pullback in an oversold market was not unexpected. The news resulted in the biggest single-day market cap loss for Nvidia, due in part to its massive market cap. Lance discusses what may be the positive results of thie "Sputnik moment" for the US. The markets' response also underscores the importance of Bonds in overall...
info_outlinePeriods of extreme leverage and speculation are not new, and the outcomes have consistently been painful for unprepared investors. The late 1990s dot-com bubble serves as a prime example. Speculative bets on internet stocks drove valuations to extraordinary levels, with investors leveraging margin accounts and options to chase gains. When the bubble burst, the Nasdaq lost nearly 80% of its value, leaving leveraged traders especially vulnerable to devastating losses. Lance and Jonathan discuss these lessons from history on today's show, plus a discussion on asset diversification, and what happens when all assets become correlated, the fallacies of diversification, and overlap risk. Money mistakes made by the young; the bset stop-loss tools and strategies; the flaw in comparing portfolio performance to the S&P Index (or any index).
SEG-1: Why Sentiment-driven Indexes are Up
SEG-2: Lessons from History - What Excessive Leverage Teaches Us
SEG-3: The Fallacies of Diversification
SEG-4a: The Best Stop-loss Tool
SEG-4b: Comparing Portfolios to S&P Index
Hosted by RIA Advisors Chief Investment Strategist Lance Roberts, CIO, w Senior Financial Advisor Jonathan Penn, CFP
Produced by Brent Clanton, Executive Producer
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Watch today's show video here:
https://www.youtube.com/watch?v=s95h3jUr3c4&list=PLVT8LcWPeAugpcGzM8hHyEP11lE87RYPe&index=1&t=2s
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Articles mentioned in this report:
"Leverage And Speculation Are At Extremes"
https://realinvestmentadvice.com/resources/blog/leverage-and-speculation-are-at-extremes/
"Extreme Speculation Has Returned"
https://realinvestmentadvice.com/resources/blog/extreme-speculation-has-returned/
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The latest installment of our new feature, Before the Bell, "Diversification Isn't What You Think" is here:
https://www.youtube.com/watch?v=rmN8a-6Yr5g&list=PLwNgo56zE4RAbkqxgdj-8GOvjZTp9_Zlz&index=1
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Our previous show is here: "Extreme Speculation Has Returned"
https://www.youtube.com/watch?v=HIfTDuPmsQs&list=PLVT8LcWPeAugpcGzM8hHyEP11lE87RYPe&index=1&t=2s
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