what annoys me the most about how the market functions, Dow...

what annoys me the most about how the market functions, Dow dropped 3%, now I can expect a 6% sell off on Monday.

I think this is just the beginning of a sustained bear market. I reckon the last rally was a mix of ppl who felt they missed the COVID lows, and investors still drunk from 20 years of fed funded good times.

Last night was the fed laying it down. They pretty much said they are gunna hit inflation hard and they don’t care for the consequences. That to me is a major alarm bell, I interpreted that as ‘you take on risks, be prepared to lose’. One thing I’ve learnt, never bet against the fed. When the fed wants growth, they tip in money you get growth in the economy, when the fed wants contraction, they will get contraction.

the early data was showing institutions were selling the past few months whilst retail bought it up. Smart money is always ahead of the curb.

Me bet is that as interest rates rise, it’ll deter many from using managed funds to pump investments as it’ll be loss making and unsustainable to feed it through a prolonged recession. More people will move from geared investments, to paying out debts, reducing overheads & tightening the purse. All these actions will contribute to not just a correction but most likely many years of negative returns. It’ll be interesting, seems like we’s about to exit an era of ‘but house prices/stock prices only ever go up’.