| Recently, the Fed released the results of its Survey of Consumer Finances. Here are just a few highlights. (Please note that these figures were adjusted for inflation, so these are real gains.) - Average family income rose 15% from 2019 to 2022. This increase was widespread across the income spectrum, from low-income families to wealthy households. It also spanned racial and ethnic groups. The median income rose about 3%.
- U.S. households' net worth rose 37% over the three-year period. That's the biggest increase in net worth since the Fed started surveying households in 1992. And it was "universal" across different types of families - income groups and races - according to the Fed.
- Homeownership increased over the period. Two-thirds of American families are homeowners. The median net home value - home value minus debt owed on the home - rose from about $139,000 to $201,000.
- There was broad participation in the good news. For example, the average net worth for Black families rose 28% to $211,500 - the biggest gain of all racial groups. Hispanic families saw their average net worth rise 19% to almost $228,000.
In short, the U.S. economy remains strong. That's good for corporate earnings, the market and certain stocks. And right now it's key that you continue to build out your portfolio of high-quality microcaps. Microcaps are the most volatile class of stocks. They are also the most profitable in a rising market. As you can see in the chart below, microcaps outperform everything else over the long haul. It isn't very close: $1,000 invested in large caps a century ago is worth $12.3 million. The same amount invested in small caps is worth $38.5 million. And $1,000 invested in a diversified portfolio of microcaps is worth $67.8 million. That's $55 million in outperformance. When investors start to prioritize corporate profits rather than what the Federal Reserve will do next, I expect stocks to rally. And when they do, it will happen - as it always does - without advance notice. And microcaps are likely to lead the charge. Build Your Fed-Proof Portfolio Clearly the Fed has created a mess for investors. Due to 40-year highs in inflation... it had no choice but to jack up interest rates. Despite the economy's resilience, this has caused havoc for many. Worst of all for investors, the Fed's moves created a rare "double decline" in both stocks and bonds. If you aren't seeing the returns you need, I'm hosting a special training specifically designed to help you. In short, through new never-before-seen research, I've found a way to dramatically increase your returns in the coming years. During this special training called How to Build the Perfect Fed-Proof Portfolio, I'll teach you how to create a new portfolio using just four simple metrics. It's free, but you need to RSVP to secure your spot today. Register here now. Good investing, Alex |
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