Thoughtful Money with Adam Taggart Stocks At A Decision Point: Which Way Will They Break? | Lance Roberts & Adam Taggart
Jan 18, 2025
In this discussion, portfolio manager Lance Roberts, known for his expertise in investment strategies, forecasts where stocks might head next. He dives into the implications of a rising bond term premium and the potential for a market drawdown in 2025. The conversation also touches on the significance of consumer behavior on economic growth and the impact of interest rates on corporate earnings. Notably, Lance emphasizes the value of using time wisely in both investing and personal goals, advocating for patience and strategic planning.
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Market Correction and Share Buybacks
- Markets weakened, but this correction is normal and often occurs during share buyback blackout periods.
- Corporate share buybacks, resuming soon, are expected to exceed $1 trillion and boost markets.
Inflation Drivers
- CPI data shows a slight improvement, but focusing on economic growth, wages, and rates matters more long term.
- Inflation is driven by supply and demand, not debt, and major drivers include used car prices and homeowner equivalent rent.
Bond Yields and Term Premium
- Bond yield fluctuations aren't solely due to inflation; "term premium" plays a role.
- Term premium is the difference between a bond's yield and its fundamentally justified value, reflecting market sentiment.