There is a lot of things going on globally in 2024 Are we about to enter the era of the reverse again? As we enter 2024 One of the biggest jokes is what all the major economic pundits were worried about last year. The Great Recession of 2023 It didn't happen in America. Americans are strong spenders. U.S. stocks also reached record highs. AI stock rises to the point where even the shareholders are smiling even when they are sleeping Why they need to work anymore? But in case you haven't noticed, the U.S. There's another bank that almost had another crisis. on the other hand Japan and the UK are in a technical recession. The situation in China and Hong Kong is even worse. What will happen to the economy in 2024? Many people said last year that the stock market had fallen so low that they were afraid to enter the market. The market has risen this year, but I'm afraid to enter the market. All of a sudden, the most popular question I've received about Rain is this. How should I invest? There is one word to describe this year's global economy. Difficult I'm going to take a look at it with you today. What's going to happen in 2024? Understanding what's affecting this market. I'll share all with you later. What are the four places I'm going to put my money? Remember to like and subscribe before I start! In February. In fact, the commercial property market in the United States is having a series of problems. Even U.S. Treasury Secretary Yellen warned that She worried about commercial property After the outbreak, many companies switched to remote working. The occupancy rate of these offices Is still half of what it was before the epidemic. And commercial office In terms of volume and price They're all down over 40%. Let's say Rain has an office. The current price is $1 million. But Rain borrowed money from the bank That's $1.2 million. That means this office. It is now in a state of distress. It is a distressed property asset. Of all the distressed property assets in the U.S. Forty per cent are offices. And the Commercial property Debt due to expire next year 70% of them are lended out by Small and medium-sized regional banks Or a lending institution At the same time, out of the 4,000 banks in the United States. In fact, more than 90% of them are small and medium-sized banks. That means that most of the non-performing debt risk are taken by those small and medium-sized banks And the office debts that will mature next year have the highest risk. What bank is taking the highest risk now? The statstic we could take references is their commercial real estate loans Not more than three times their capital. It's the CRE Ratio. And you're looking at a bunch of high-risk banks. 98 per cent are small and medium-sized banks But there's only one. Large banks with a market capitalisation of over $100 billion are on the list. This is NYCB. After acquiring Signature Bank last year. Regulation in the United States requires large banks To increase the provision for this loan loss And NYCB's provision for loan losses all gone up in a flash. More than ten times than what is expected It also exceed the total provisions of the firm for the prior decade In the last month, The bank's share price has plummeted by almost 50%. In fact, the bank loan loss reserve It's the bank's money that's been set aside for this bad debt. It's actually a good thing. Because it reduces the liquidity risk of the bank. I have just said that more than 90% of the American banks are all small and medium-sized organisations. If the bank is really in crisis The negative impact on the economy as a whole can be significant. But this time, since this NYCB has been taken out. I think it's a good thing. But I'm going to avoid investing for the time being. These small and medium-sized banking stocks Real Estate Related REIT Stocks In particular, these REITs in the commercial property category have been the subject of a number of studies. Everyone should be aware of their credit risk. Another thing to keep in mind when it's March Of course, it's a carryover from last year to this year. China's property crisis and stock markets China's CPI has been falling continuously January's figures were the biggest drop since 2009. The Producer Price Index also fell by 2.5 per cent. That means the cost of production has fallen for 16 consecutive months. As we all know, the property market accounts for a quarter of China's economy. Also for two consecutive years their prices have fallen by more than 9% per year China is now facing persistent deflationary pressure. Of course, each country's situation and policies are a little different. But in economics Usually no country wants deflation. Because when prices are expected to fall in the future Whether it's a consumer or a company They all put off spending or investing. This will result in a reduction in immediate demand Enterprises also cut production and new investment. It also delays their expansion plans. This could lead to a reduce in economic activity. The unemployment rate rises when there are fewer people to hire. The absence of a workforce has led to a significant drop in household and spending power. The purchasing power of money increases in times of deflation. That means you're in debt from the past. The real value is now much higher. That is to say, more loans will be default. There's a chance if there is breach of contract. Or even bankruptcy if you can't pay them back. It would also create uncertainty for the entire lending market. At this time of uncertainty in the lending market. If I am a bank, I am going to reduce the amount of new loans. Less liquidity in the market will also slow down the growth of the economy as a whole. This is what we call a vicious economic cycle. The People's Bank of China (PBOC) has just released the five-year LPR - Loan Prime Rate Down 25 points. Now only 3.95 per cent It's the biggest downward adjustment ever. Five-year LPR In fact, it is closely related to the interest rate of the mortgage loan. That's why many Chinese banks have followed suit and lowered their interest rates. There are several effects of this downward adjustment of the LPR. The first is to reduce the interest expenses on borrowing money to buy a flat. Boosting the property market. The second is to stimulate consumption and the corporate economy. This will also increase the demand for Renminbi. Boosting the Renminbi So what will happen to China's economy in the future? You can keep an eye out for the month of March Fiscal policies of the Two Sessions Let's see if we can get more information. If you're investing in U.S. stocks I'd suggest you keep an eye on it. Which companies have more business in China? Watch out for these companies in the S&P500 Taking Apple as the example One fifth of its income are coming from Greater China. So in fact, for Apple China's economy has a strong influence on them. So many people want to know - Tesla NVIDIA or AMD, etc. I've got it all sorted. Their revenue distribution in China is approximately like this. All right, go to April. What we need to pay attention to is Japan's interest rate. Japan's GDP in Q4 Unexpectedly negative GDP for two consecutive quarters In other words, Japan is in a technical recession. Japanese stocks at multi-year highs Isn't it confusing? I'll explain it again. Let's look at it in two parts The first is to look at external demand Generally speaking, the performance of Japanese companies are performing quite well Their exports in January That's an 11.9 per cent year-on-year increase. It's better than expected. But if you look at their internal demand Japan's wages have been on the rise for four consecutive months. Growth of 2% or more But it is still lagging behind inflation. Household spending has fallen for ten consecutive months And inflation has affected some companies Business spending also fell 0.1 per cent in Q4 Here's where it means inflation is weakening the purchasing power of Japanese consumers This has led to a weakening of their spending I'll tell you some more stories. Bank of Japan BOJ in fact in 2013 signed a joint statement with Abe government at the time. They promised a 2% inflation target at the time. This is also the Bank of Japan's reasons for maintaining ultra-low interest rates over the years Although inflation in Japan It is now above 2%. for over a year. However, the Japanese Prime Minister still said recently They have no intention of changing the joint statement for the time being. But it seems to be like The Japanese government stood strong But Japanese companies and banks are honest when they took action If you look at the data Since October last year Major Japanese banks have begun to park their funds in The Bank of Japan's negative interest rate account And even more so in December. The amount of yen put the account is 3.2 trillion yen. In fact, the banks in Japan never liked to Putting money in the central bank before Because if the money save in the central bank. Not only can't you earn interest. And you have to pay for it. It means paying interest to the central bank. And this time, a large amount of bank deposits The only thing that can be explained The bank, of course. Expected cancellation of this negative interest rate policy in Japan They are no longer in a hurry to borrowing money out lending the money out Over the past one to two years Because Japan and the United States There's this yield spread problem. Causing the yen to depreciate When interest rates in the US were higher than those in Japan As long as you invest in US dollar assets For example, U.S. Treasuries This will increase your return. Attract more investors And that all pushes up the value of the dollar. But with US interest rates expected to be cut this year This spread will narrow. And there's a chance for Japan, too. Abandon the negative interest rate policy. In fact, there is a chance that the yen will rise again. I know there are a lot of people lately. They're all looking at this round-the-clock trading opportunity. That's why I'm having Saxo sponsoring this video today Foreign exchange transactions can be said as Saxo's strengths Their rates are very competitive There are other currencies, of course. Trade at your own discretion If you look at the Japanese stock market Now Japan is in the technical recession. That is to say, although the central bank is planning to raise interest rates but it is not ready increase the rate in March And the stock market has always disliked interest rate hikes So a recession is actually good for the stock market. But we should also pay attention to BOJ in April See if the YCC's interest rate cap will be raised If you want to learn more YCC You can watch back the previous video The Japanese stock market has been lost for 30 years. But Nikkei 225 extends rally and every day has new all-time highs But there are not many platforms in Hong Kong where you can buy Japanese stocks. There are very few choices. Saxo provides a one-stop platform for both forex trading, stock trading and other assets trading You could buy the stock of different famous Japanese companies in Saxo You don't have to look at several platforms to trade. Saxo also shared some good news with me recently. That's the handling fee they charge for trading Japanese stocks. has been reduced As low as 0.03 per cent as low as 800 yen. If you are interested You can click on the link below to take a look On the other hand, if Japan really enters a cycle of interest rate hikes The world is now at the end of an era of negative interest rates. There could also be a reshuffle in global investment environment That means whether you buy Japanese stocks or not, you will be affected. Over the past few decades Japanese investors are very smart. They took advantage of the low interest rates in Japan. Borrow money in Japan first And invest them abroad. Where yields are higher Therefore, without getting noticed Japan became the world's largest overseas investor. And this time Japan ended the negative interest rate policy. It could trigger a major capital shift Large number of institutional investors are going to invest their money in the Japanese stock market and real estate It will also increase the demand for Japanese government bonds According to the IMF data Japan is the world's largest international investor It is also the largest foreign investor in U.S. Treasuries. And in the case of non-Japanese equity holdings It's ranked in the top five in the world. Japan invests the most in the USA, Australia, China and Germany. That's why we have to pay attention. the impact of Japanese capital withdrawal from these markets The next one to watch out for is the Indian market and its elections. The Indian stock market surpass Hong Kong at the end of last year Becoming the world's seventh largest stock market Although India will hold its next parliamentary elections in April. But frankly speaking, the next parliamentary elections in India its impact on the stock market would not last long If you want to research about the Indian market I will be looking at the amount of net foreign direct investment into India FDI India in this financial year has been attracted 33B FDI in the first half financial year And in the previous fiscal year it attracted 71 Billion. India's FDI inflow It has risen by 77 per cent in 10 years. However, investors should also be aware that India's Net FDI is slowing down Net FDI is its inflow minus the outflow. It's all about how India invests its money overseas. So why the slowdown? This is mainly due to the global economic growth are all slowing down And coupled with the fact that Indian central bank is expected to have a rate rise and so on. But overall FDI in India compared to other major Asian countries Inflows are doing a good job Compared to Vietnam, it's 36 billion. They also surpassed China's 33 Billion. China's FDI is now at a 33-year low. That's an 82 per cent drop from 2022. South Korea is 18 billion. Well, in June. We'll have to keep an eye on this ECB decision. Contrary to the United States The European economy doesn't seem to be doing so well. Although the eurozone is recession-proof. But the EU France and Germany are both still in the economic doldrums. The German central bank has already warned Maybe Germany is going into the technical recession. And France? GDP in the last two quarters of 2023 It's all zero The EU has just lowered its GDP growth rates in France and Germany for the full year In this situation of high interest rates, low external demand and geopolitical tensions, it is not easy for the Government to make a decision on how to deal with the situation. All of which have hampered the economic development of the eurozone as a whole. But in this economic downturn European Central Bank to stimulate the economy They said they might cut interest rates in June Benefit from this expected rate cut In fact, the stock markets in Europe have also hit this record high. These four stocks include AMSL, Novo Nordisk, etc. Stocks Europe 600 Index 65 per cent increase If the market believes that the ECB is going to cut interest rates. It will put pressure on the euro. Investors will then look for higher yielding currencies. This is because the whole eurozone expects the cost of borrowing to go down. The yield on the bonds will be reduced again. Therefore,the price of the short- to medium-term bond will be lower than the price of the other bonds. It has the stimulating effect So will the US cut rates after June? Look at the Dot Plot from December. FOMC hints that this inflation will fall faster than expected At that time, it was also said that there might be three rate cuts in 2024. All of this is some great soft landing information! And looking back at the FOMC's latest January minutes We all agree that interest rates has reached to the peak But they don't think it's the right time to cut rates. Cutting interest rates too early may trigger another round of inflation. But the Fed is warning us now. Current Valuation of Stocks and Property Prices are too expensive relative to their fundamentals. Indeed, if you look at the ratio of property prices to rents. It's all obviously foam. The fed has repeatedly stressed that They're going to act according to the data. That means if the data tells them they can cut the interest rate, they would cut the interest rate. But looking back at the CPI the CPI for January are still higher than expected Plus the labour market is so strong. when the property market is in a bubble So can they still do it? What about the three rate cuts? There's no 100% confirmation yet. But if they end up doing less than three interest rate cuts The market may enter correction Because the valuation is too high now. Some of the officials, revealed in the the minutes of the latest FOMC meeting expected a potential slowing in balance sheet run-off in July That's less than 95 Billion. If that's true. This will increase the liquidity of the market as a whole. It will support the whole market. But watch out. Interest rate cuts also mean that the Fed has to take care of the economy. It will have an impact on some cyclical industries. I'll talk to you later. Okay. Go to November. It's the U.S. presidential election. From 1960 to the present In 16 election years Only twice has the S&P500 fallen in that year. They were the dot-com bubble and 2008 financial crisis The average return for the entire U.S. stock market in an election year is 10.5%. deducting the two years mentioned just now In fact, the average increase in the S&P500 is 15.3%. But the average growth of the whole stock market history is 10.1%. That's what I'm saying. The stock market usually performs better in election years. Of course. Usually the incumbent president is trying to get votes. Or soothe some emotions All of them will implement some economic stimulus policies before the election. Okay, we're finally getting to the investment part. This year, the global economy It's all in one word. Difficult U.S. stocks are now at historic highs. But the world still faces different problems. If Asia and Europe economy do not go well How can the U.S. economy do well? Taking into account the different economic situations around the world The first place I'd put my money. Investing in yourself, of course. That means you have to add value to your skills. Learn and invest in yourself It's an investment that never loses money. And the return is always positive. I've made different videos before. Mention how to go about improving your skills Skills not only give you more job opportunities It also increases your competitiveness in the marketplace. 57 per cent of Hong Kong people Still think they have to work after retirement If you're going to want to How do I get rich I want financial freedom. That's a good goal. But for many, many people. It's a very distant goal. So far away that I don't know how to start. I suggest you start with a smaller goal. I'd recommend saving HKD 800,000 That's $100,000 in US dollars. Legendary investor of Berkshire Hathaway Charlie Munger has a famous quote he said The first $100,00 is a bitch, but you gotta do it I do not care what you have to do If it means walking everywhere and not eating anything that wasn't purchased with a coupon, find a way to get your hands on $100,000 The $100,000. should be the money that you can use at any time. Not including some credit cards or borrowed money. And that doesn't include your outstanding property loan. If you haven't saved $800,000 by now. If you don't have any health issues Or some special reason. That means you have to reach this threshold It's just a matter of time. Then there's only one solution. Take action right now Don't wait any longer. Stop giving yourself excuses. Ask yourself. All this so-called travelling, entertainment, restaurants, cinema. Buy clothes, buy handbags, buy sneakers. These consumption expenditures Is it true that most of the money you can afford not to spend? When you can reach your first 800,000. Your whole money world is so much bigger. You don't have to worry about it anymore. Even if you are being laid off tomorrow even you have some family emergencies, you do not need to worry about money And there are a lot of investment in the market with an average return of 8% If you use them to make a compound interest. If you invest 800,000 in the first year. Just leave it for 10 years Even if you didn't invest any more money in those 10 years. With the power of compounding You'll have more than doubled in 10 years. Of course. Investments are not blindly rushing into the market. Long-term investments must be do valuation properly we also need to study the company's financial data. Then You'll know when it's a good time to enter the market. If you want to learn more This Zero to Hero and Passive Income course will help you build a good foundation. Click on the link below if you are interested The Psychology of Money the book has mentioned Wealth is actually an asset accumulated after consumption. It's not how much you earn that makes you rich. It's that you need a high savings rate. alright, when you have a high savings rate and having financial literacy You are welcome to start your own investment Well, the US stock market is now. all-time highs Many people have asked me Shouldn't we rush into the market? Rain And here's my answer. Yes and No Over the past 30 years Best trading day for US stocks In fact, 50 per cent of them fall in the bear market Inside the days of the downturn And in a bull market. Actually, only 22%. It's a good trading day for the stock market. So for investors A good time to enter the market It's not about market performance in a bull market. not buying stock blindly Then history tells us Continuously invest every day It is more rewarding than trying to capture the peak This so-called market peak Five times higher Even if you miss 30 Miracle Days. Investing like this over a long period of time Still beat those investor loss the trading days It's like losing the chance of compounding The consequences will be more serious than buying the wrong stock. Losing more returns For those who don't have time to watch the market Or maybe you're a newbie piggy. The best way to invest in US stocks With this one. the investing method for piggy Regular, Fixed, Long-term, Ongoing I'd like to reinvest like this. You bought it when the market went up. You bought it during the stock market crash. This video teaches about that in detail Therefore, there is actually no need for us to be fear in the bull market and bear market But back to US stocks. Over the past year Seven companies have already taken over two-thirds of the rise of S&P 500 That's the problem. Even if you're invested in a broad market index. If these seven companies If one of them goes down The whole market will be dragged down. right Take a look at this Magnificent 7 These seven names Every 10 years These seven companies will be reshuffled once. But if you look back broad market index It's like VOO, QQQQ. In fact, it has been performing since 2014. The entire U.S. stock market. is consistently better than the global stock market All of them do better. So these index ETFs I've been investing in them for years. It's a stock that will never be sold. Also if you go to the second half of the year Investors should be aware of Reducing the interest rate means The Fed has to take care of the economy. the overheating of the US economy. Successfully suppressed. It also means that their economic growth will slow down a bit. This may have an impact on cyclical industries Because stocks in cyclical industries Often associated with economic growth There is a high degree of correlation Typical cyclical industry Including steel, motor vehicles and consumer goods. Semiconductor, etc. Which industries will have an advantage? The first is of course technology stocks Benefit from AI and Continuous Technology Development A lot of tech stocks are going to do well this year. Many people ask me about AI-related stocks. In fact, apart from the stock king NVIDIA What's the alternative? Of course. There are many industries at the upstream and downstream of AI Including semiconductors, software, data storage Semiconductor testing and enterprise AI integration, etc. Each sector is represented by different companies Reasons why I like the Saxo platform myself It's not just for trading. The whole platform also has valuation data and business data. Operational capacity data and so on and so forth. It helps us to do our homework when investing. They are this AI theme with related analyses It's like a big investment database. They've also reduced their U.S. stock handling fees in the new year. Lower transaction costs If it's RainIsHere's audience whether you are opening account for local Or a European offshore Saxo account. use this link and you will get $1,000 cashback when you open an account For details, please see the following link another industry Health Care It's also an all-season industry. There's a lot of it in there. Pharmaceuticals, medical equipment, biotechnology, etc. It's all under this Health Care. The whole AI development It also accelerates the pace of research on these devices and drugs. And the whole Health Care The demand for it is essentially continuous and stable That's why it's fall-resistant All of them are better than other industries. It's a little more stable. I'm aware of some of the medical stocks. There are relatively cheap valuations. Like J&J And a reminder. This is not investment advice. Do your own valuation modelling before entering the market Researching financial data, etc. And other popular medical stocks It's like ISRG, Abbvie, which I mentioned before. These have gone up a lot. So if you want to get into the market Be patient and wait for your chance. Another industry is Essential Consumer Industries This is also defensive. i.e. a defensive stock Like Costco and Walmart. I do have holdings. It's been mentioned many times on Patreon. This is an everyday necessity. Overall demand for the company's products is stable. It's also less susceptible to economic fluctuations. Investing in these stocks in 2024 could balance risk. And if you follow the channel RainIsHere. for over a period of time I believe you have been holding the stock for 9 months to a year or more. Be careful to remember to rebalance. That is to say, it is the profit of a portion of the hedging I've done a free AI rebalancer before. If you have enrolled in any of the course You should be able to use it for free. Although U.S. stocks Outperform the global market for 10 years The United States does still face The Problem of printing too much money and high national debt A look back at the UK stock market in the current year The market capitalisation in that year was 25% of the world's total stock market. Down to only 8 per cent in recent times Japan has also moved from nearly 40 per cent of the previous global market capitalisation After 30 years, it's down to 5 per cent. So will the U.S. market always be dominant? No one knows. However, because it has a stronger foundation So U.S. stocks are still are one of the most important investments tool on my portfolio But if you look at this Buffet Indicator. This U.S. market still belongs to high stock values. Now doing 179.4 The normal value of this stock should be between 105-128. So in order to reduce the number of Over-concentrated regional risk It is absolutely feasible for investors to invest in other overseas stock markets, property markets and foreign currencies Even the cryptocurrency market. In anticipation of interest rate cuts In fact, the cycle of the property market It might get better after next year. However, it should be noted that real estate is immovable property. That means it's extremely illiquid The investment period is very long. So no matter what country you're in, When you buy real estate, please consider if you parking your money there for the long term. How safe are you in that area? And what about the economic and political stability of that area? And in overseas stock markets India and Japan are hot spots. I have share my views before in different video As for the basket of foreign currencies. In anticipation of interest rate cuts in the US Spreads will be reduced. So there will be support for all foreign currencies against the US dollar. The yen is so cheap now. Many people would consider buying some yen To hedge against foreign exchange risk in the event of a subsequent interest rate cut by the US dollar. As for Bitcoin and Ethereum. They are all cryptocurrency assets that I have held for 6 to 7 years. In anticipation of interest rate cuts Market-wide appetite for risk Actually, it's much higher. So there will indeed be more opportunities in 2024 Plus the whole cryptocurrency market is used for decentralisation. Hedging the risk of US dollar depreciation and the risk of Fiat Money due to the massive debt of countries around the world. I've done different videos before. All right Saxo is giving away $1,000 for opening an account. The promotion will only last for a month If you want to open an account Remember to click on the link below That's all I have to share today. If you like this video Remember to like, leave a comment and subscribe! See you next time, bye!
