Some very large Pension Funds are pulling away from investing in stocks (equities) and reducing the share of stocks they hold. They include some large funds. Goldman Sachs analysts “estimate that pensions will unload $325 billion in stocks this year, up from $191 billion in 2023”. (quoted from WSJ article Heather Gillers/Charley Grant April 19, 2024). The article goes on to state “Like investors of all kind, the funds slowly adapting to a world of yield”.

The current trend going forward from evidence I have seen since Nov. 2023 is the realization that inflation isn’t going away easily. The Fed has only so much power in what tools it can implement in trying to drive down inflation without contributing to a recession. In cycles, it takes time for things to turn around and all the money free flowing for the past 25 years of easy credit and low rates eventually had a huge impact on the overall economy once Covid had done its damage. Once the Covid subsided the real cat was out of the bag and it was evident that stocks were starting to not be able to hold onto real gains and the cracks started to appear. There would be days of nice run ups only to see choppiness that had not been seen for quite some time. For quite some time it was one only had to invest in tech and you were pretty much assured that your portfolio would go up nicely.. I noticed this trend changing about 6 months into the Covid when all of a sudden it seemed really difficult to get q solid 15% return per year that seemed like nothing from previous years.

Market direction has been obviously changing and it does not appear up. When large amount of dollars start to flee stocks for any reason, there are less investors buying therefore prices can and obviously are more likely to not make gains. That is simple Econ 101. Adding to this step away from the easy days of investing, we add inflation and global conflict and more and more bad news each day and the market investors start to look away from stocks for safety and yield. All of sudden boring bonds and CDs don’t look so bad nor does gold, silver or anything other than watching stock prices go down or not rise.

A good read now is David Stockman’s book on the Great Money Bubble. He ran the OMB under President Ronald Reagan and gives a simple to read, thorough history of the Federal Reserve and the world banks behaviors and policies that resulted in too much easy money and other economic problems that resulted in what we see today.

More on the economics of the market today next week right here for members and non members of which I will have two separate sections as we continue! Have a great weekend!!