Why today's market dynamics are 'a tale of two countries'

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Caleb Silver News

Market Volatility

The major indexes (^DJI, ^IXIC, ^GSPC) have been hitting new highs this week, fueled by a cooler CPI print signaling moderating inflation, the resurgence of ...

However, as Investopedia Editor-In-Chief Caleb Silver puts it, it's"a tale of two countries" – because while markets soar, many consumers are still grappling with

Yeah, see they're going to want to get in those that are, that are enticed by the meme stock madness by the like, oh, I can get into this and take advantage or make a quick buck.And if you're just getting in for the first time, you're gonna get spit out by that, that we call catching falling knives.

When people are shopping for food, we learn from food and wine, they're going down market a little bit, maybe that middle section of the wine uh of the wine store instead of top shelf right now.And what we learned in Home Depot's earnings was that people are pulling back on those large big ticket redos renovations that diy consumer really pulling back and, and perhaps looking for other ways just to stretch their dollar the best they can.

We always say that, that said if you look at the last 20 years, you could have really diversified by picking an index fund, picking an ETF thrown a few darts at the dartboard and been all right, in a low interest rate environment, right?Now, there's a big question about whether or not that's actually gonna work going forward or if you need active management to really get you that higher alpha that, that a lot of investors are seeking.

You know, when you think about commodities, when you think about real estate, when you think about cryptocurrencies, other asset classes, how should you sort of narrow these down in your head to say, hey, where do I even jump in?Start with some ETF S that represent the market.But in general index funds just so you understand all the different stocks that go into say the S and P 500 or the Russell 2000, build your foundation there.

But a couple of them would never be in your playbook for monster Amazon, Amazon number one monster monster, number two.There's a couple other, there are on that list that just don't make any sense.So I went with the index funds and the ETF S and finally when I had enough assets and it got too confusing for me.And I want a pro in charge.All right, for our viewers on our live streaming platforms, we're gonna take a quick volatility pause for everybody else.

So with our data journalism team, we went and we quantified reasonable expectations for what that dream would cost and these are reasonable expectations.That's not crazy if you own a car for 1012 years. They just start spending and keeping up with the Joneses or getting the new truck or taking the, to get swept into that.We're a hard working, uh, uh, a bunch of Americans who want to take a vacation, who wanna do, uh, have nice experiences.

But then it's like everything all at once after about 1520 years when the numbers start to get bigger.Like we had post pandemic.You did it 10 years ago when you started investing on a regular basis and adding to it and letting that money work for you.It's a metaphor, uh that I learned from Vivian too who says you have two pools right now?

And since the theme of our show is retail in the US, I'm gonna ask you what investment style are retail investors owning or wearing the best?Well, passive investing is something you can wear for all seasons. You know, how has your past informs what you're doing at investopedia here, whether it's your gardening, whether it's your filmmaking efforts, anything like that.Right, because there was a lot of financial trauma in my family.I did it all right because there was some financial trauma and I didn't want to leave my financial future in somebody else's hands.So I started working very young, probably too young uh for labor laws.

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