Stocks breaking above 5,000 for the S&P 500 (SPY) is a hot topic right now. However, it’s important to remember that trying to time the market based on Fed rate cuts is not always logical. In a bull market, it’s generally best to stay invested and not try to predict when the next bull run will happen.
Market timing is often seen as a “fool’s errand,” so staying bullish during bull markets is a wise strategy. While not every stock will go up, it’s worth focusing on stocks that have the best chance to outperform in 2024.
This week saw some ups and downs in the market, with stocks initially breaking above 5,000 but then facing a decline after a hotter than expected CPI report. Despite this, stocks rebounded and closed above 5,000 again.
The current market trend suggests that investors may need to look beyond large caps and consider small and mid caps with strong growth prospects and reasonable valuations. This approach, combined with utilizing tools like the POWR Ratings system, can help identify stocks with potential for future outperformance.
Overall, it’s recommended to stay bullish until there are concerns of a recession that could impact the market. While large caps have seen significant gains in recent months, small caps are showing potential for leadership in the near future. Investors should keep an eye on the market dynamics and consider diversifying their portfolios to include a mix of different types of stocks.
SPY shares were trading at $500.82 per share on Friday morning, showing a gain year-to-date. It’s important for investors to stay informed and consider their investment strategies carefully in the current market environment.