The Nasdaq Bull Run, & Is Your 401k Safe?

TL;DR

Defensive money is flowing into money market funds, government bonds, and gold, while tech giants like Apple and Microsoft are attracting investors looking for safety.

Transcript

let's talk about the market and where the money is moving this year uh last year we saw the NASDAQ ticket hit 33 but down 33 for the year a lot of the companies we talk about and love come from the NASDAQ obviously is full of tech companies so let's talk about where the money is moving we've seen companies like Nvidia have a great start to 2023 we'... Read More

Key Insights

• 🤑 Defensive investments like money market funds, government bonds, and gold are attracting investors seeking safety during market uncertainty.
• 💪 Tech giants like Microsoft and Apple have become the safety trade for many investors due to their strong market capitalization and cash reserves.
• 🧑‍💻 The NASDAQ 100 has been performing well, driven by the largest tech stocks, indicating investor confidence in these companies.
• 👣 Credit default swaps can be tracked on certain bank platforms, providing insights into market vulnerability and potential risks.
• 🤑 Brokerage failures are relatively rare for well-established firms, and investor money is generally insured up to $250,000 in case of a broker's insolvency.
• 🍉 Cycles and market fluctuations are normal, and long-term investors who stay invested often fare well over time.
• 📈 The NASDAQ is expected to continue its upward trend as investors seek growth opportunities in tech stocks.

Questions & Answers

Q: Why are investors moving money into defensive investments like money market funds and gold?

Investors are seeking safety amidst market uncertainty, especially after the recent bank issues. Money market funds and gold are often seen as safe-haven assets during times of stock market volatility.

Q: How can one track credit default swaps and determine their price?

Research shops, newsletters, and some banks track credit default swaps daily. One can check the pricing and expiration date of credit default swaps on certain bank platforms by entering the specific ticker for the swap. However, it should be noted that credit default swaps are generally not accessible to retail investors.

Q: Has a brokerage ever gone out of business and resulted in investors losing money?

While brokerage failures have occurred, it is relatively uncommon for well-established brokerages like Schwab or TD Ameritrade to go out of business. In most cases, these firms are acquired by other companies, as investors' accounts are highly valued assets.

Q: Are there other commodities besides gold that should be monitored in 2023?

Apart from gold, commodities like chocolate, sugar, copper, and lumber prices can provide valuable insights. Copper, in particular, is considered a leading indicator for the economy, and lumber prices can indicate trends in the housing market.

Summary & Key Takeaways

• Tech companies like Nvidia, Microsoft, and Apple have had a strong start in 2023, attracting investor attention.

• Money is flowing into defensive investments such as money market funds, government bonds, and gold, as investors seek safety.

• The NASDAQ 100, driven by the largest tech stocks like Apple and Microsoft, is performing well in 2023.