The first 6 months of 2023 have brought a lot of uncertainty and there has been a real fear of recession, inflation rose, we’re still recovering from the pandemic, mortgage rates are still sky high, but good news! The stock market has rebounded.

Inflation is cooling

Inflation is when we are paying a lot more money for simple goods (like energy, food, housing, clothing etc). The end consumer is paying much more for these goods than expected. If the Annual 2% increase that the Federal Reserve Board sets rises more than 2% annually, this is what determines whether we’re in a recession. In 2022 inflation was up by 8% and right now we’re closer to 4%.

The FRB’s meeting on June 13th confirmed that the latest CPI data points towards a decrease in consumer price index - a measure of what the end consumer is paying for goods like energy, food and housing.

An increase in interest rates ensures inflation doesn’t soar, and although further interest rates are not off the table, this does mean people have less buying power as the costs of goods are still high.

The stock market celebrated by trending bullish, this was a win and stocks soared this week. (Bullish means that dividends are being paid to investors, stock prices are rising and people are making money.)

The S & P 500 is up (the top 500 companies trading on the US stock market) - by 9%. The S & P 500 usually gives an annual return of around 8%, but this is up by 9%, which is great.

So what’s caused the rise?

1. Excitement over the tech sector and AI (artificial intelligence).

Companies such as Google, Microsoft and Medi-IA have been the cause of this rally. If you’ve invested in these companies you’ll be reaping the benefits!

2. Oil Prices and the Energy Sector

Oil prices hover around $70 a barrel but OPEC countries that met on June 4th, especially Saudi Arabia, want the price to rise to $80 a barrel to pay for its expensive budgets and its ambitious projects, or they are threatening to decrease production.

Saudi Arabia controls 15% of the world’s oil reserves and there’s not been a shock to the energy sector YET. Oil cuts affect the end consumers and even though oil cuts have happened most recently in April 2023 - due to looming fear of recession and China’s sluggish economic rebound, due to the pandemic, has caused the market responses to be muted.

For now, the energy sector hasn’t peaked.

So, should you currently invest in the stock market?

The perfect time to invest is ALWAYS NOW. Timing the market is very difficult and hence always investing in the S & P 500 index fund is the way to go.

As Warren Buffet states, “Every American should be investing in the S & P 500.”!

The tech sector this year has done brilliantly, so this is a good place to start.

Also if you have a minor in your care, the earlier you invest for them the better! Open up Minor Accounts for them. They will pay their dividends and make you money in the long run. It’s very accessible and even if you only have $1 to invest, start now.

Be the role model and apply the principles of financial literacy - share with your child the principle of investing, why to invest, how to budget. Actively share your knowledge to educate your child.

Time is Money in the Stock Market. So start NOW!

Where to begin?

Start with your Emergency Fund! You need 6 months of money “just in case” something happens, which should cover your mortgage/rent, food, all of your bills (including your cell, gas, electric, water, groceries), saved in the form of CASH.

Then take advantage of the accounts with tax breaks, like a Roth IRA. You can be self-employed to open one for yourself and your children (if you have a legitimate job).

Knowing what’s happening every week in the stock market empowers you to make decisions on what to invest in and builds your financial literacy!