Its Over, page-23002

Two Paths to Play the Upcoming Rate Cut Cycle.

https://x.com/kurtsaltrichter/status/1816191856725876864


I've been saying since the start of the year that the economy is losing momentum.
The market, with its high valuations, isn't acknowledging that an economic slowdown or contraction is even possible.
A hard landing is not priced into equities at all.

With the market pricing in a 100% chance of a Fed rate cut by September, I have examined market history by looking at performance in the 6 months before and after the first Fed rate cut...

My research presents 2 scenarios if the next rate cut cycle mirrors past ones: **Path 1:** Economic activity slows, weighing down much of the market, but tech and growth styles outperform (seen in 2008 and 2019).

**Path 2:** Economic activity slows, defensive sectors outperform, and tech lags significantly (observed in the early 2000s).

Bottom line: We're on the verge of the first major rate-cut cycle in years. While investors often see rate cuts as positive, the reality is more complex. Historically, rate cuts have led to volatile markets and varied sector returns.

I urge everyone to have a written down risk management strategy.

Hope is not a risk management strategy.

Knowing when to exit a long-term position is crucial to protecting your hard-earned capital.

If you can avoid major drawdowns, long-term outperformance is very possible.