所以降息股票是漲還是跌？

Hello everyone, I am Terry. A few days ago, I saw someone on Thread asking why the interest rate has dropped and the stock price has fallen. Many people are discussing whether the stock price will rise or fall in the United States. Today, I will talk to you about this issue. What is the impact of the fall on the stock market or other assets? How to grasp this opportunity? First of all, last Friday, the US Federal Reserve Chairman, William Chua, said: The upside risks to inflation have diminished.

and the downside risks to employment have increased. The time has come for policy to adjust. The risk of inflation has been reduced, but the risk of unemployment has begun to increase. And then he said it's time to adjust the policy. Why do some people say that after the U.S. Fed's recession, the stock market will rise, and some people say it will fall? First, let's look at the impact of the recession in the simplest and most objective way.

In theory, after the fall, those high-risk, more debt-ridden small and medium-sized companies will directly benefit. The reason is simple. When the cost of borrowing becomes lower, borrowing becomes easier, and financing becomes easier. So these high-risk small and medium-sized companies, because the capital is not turning well, the probability of collapse will drop a lot.

Plus the price drop, in the past 1-2 years, we can get the highest rate of saving in the lowest risk way. The interest rate of the state debt, which is 45%, will also become less. Even if we look at the US state debt in the middle and short term, it can reach 45% interest rate. So the capital has been in the low risk place for the past 1-2 years. Because the capital is put at a low risk, you can earn a 45% interest rate. Who would want to put money in the stock market?

And that's why the dollar has grown so high and so expensive in the past year or two Because the funds have been left to the United States to earn these low-risk high interest rates After that, the interest rate has dropped by 4% or 5% and the funds will return to the stock market again We can also see clearly from the trend of recent US dollar prices that the US dollar has begun to decline Since the old man finished this sentence last week, the US dollar has declined a little bit In fact, it is not only the stock of small and medium-sized companies that will benefit Of course, the profits of these companies will be particularly

Because the interest rates were too high before, so their stock was very depressed. The tighter you press, the more force you release. But in fact, the entire S&P 500 has become rich because of the interest rate drop. The most important thing is that the funds are slowly coming back. From the original debt, the monetary market fund has slowly transferred back.

especially in certain industries, there will be a more obvious rise, such as the real estate-related companies will have the most direct impact. For example, let's look at this IShares Core US REITs ETF, which is an ETF of the US real estate investment trust fund. They have a clear rebound trend since July. And I used to work in a company called Blind, and the company's stock also has a clear rebound trend.

Blank is also a fintech that relies on real estate to eat. In addition, any company that actually relies on AI to make money will be bribed because the interest rate drops. Because there will be more and more companies in the future, more funds will be invested in the field of AI. So these companies that provide AI-based facilities such as Palantir, Microsoft, Nvidia, and Broadcom will make a lot of money.

Next are those high-credit companies such as J&J, Coca-Cola, McDonald's will also cause a loss. Because when you save the money in the bank, or the state debt, or the deposit, and you can't get the previous 4% or 5% interest, the funds will start to transfer to these high-credit companies. If you really want to make high-credit, you can buy ETFs such as SCHD or DVY. I prefer SCHD.

Because its price has been rising steadily and the stock market is doing well. Of course, the most affected by interest rates is the automotive industry, such as Tesla. I think Tesla is a special case. Not only will the demand for buying cars rise because of the drop in interest rates, Tesla is also an important bet for AI. In addition to the stock market, the real estate industry will also be directly affected. Because the interest rate was too high before, it became difficult to buy a house.

In the US, it was last year, around October last year. The most expensive fixed interest rate mortgage in the US for 30 years is about 8%. Now let's see who can afford a 8% loan. Let's look at a $1 million house. Loan 800,000, 8% interest rate. 8% interest rate, you have to pay nearly $5,900 per month.

It's equivalent to your family tax revenue If you don't have $200,000, you can't afford it at all. If we lower the loan rate to 5% You only have $4,300 left to pay every month. If we directly pull back to the epidemic At the lowest time is 2.5% You have to pay a loan every month, which is $3,000

It's about half the interest rate than 8% And it only lasts for a short period of time So the interest rate will drop later The number of people who buy the house will increase The demand will rise Naturally, the price of the house will be raised Then there is the cryptocurrency I think this is very understandable Because the dollar value is changed Plus the investment of high-risk funds Bitcoin and other cryptocurrencies Naturally, these high-risk investments It has more room for growth Let's look at the other side of the story

Why did the stock market go back a wave after the old man finished talking about this? Then many people jumped out and said that in fact, after the fall, the stock market will fall. Then what I want to say is that in fact, the fall or rise will not directly cause the stock market to rise or fall. Why will the stock market rise or fall? What is the premise of the rise? The premise is that the company's profits are constantly growing. The rise or fall of the stock market is mainly back to the basics. The company's money-making

This is what really affects the stock market. Of course, many short-term fluctuations are purely market emotions. The saying that the fall of the stock market will cause a fall in the stock market is because, according to history, sometimes the U.S. Fed starts to fall too late. The economy has become very poor, and it is not because of the fall that the economy has fallen. The relationship between the UK and the UK must be clear. If you don't understand this, you can imagine the entire national economy as a train. If the economy is too hot,

The train is too fast, it will be like the previous inflation rise, and the risk of going out of the track will be increased. If the train goes out of the track, it will be basically GG. The consequences are unimaginable. So the role of the United Nations is to step on the brakes when the economy is too hot. Increase interest rates to reduce economic activity Let the train slow down a little bit, but not too slow. Our train has reached a speed now. If it is slower, there may be a risk of stopping. So the United Nations should start to slow down and step on the gas a little bit to promote economic development.

And the throttle and the throttle can't step on the gas. Need to be supplemented little by little. Slowly raise this speed. To ensure that the inflation will not continue to deteriorate. We have experienced it several times. In fact, when the United Nations started to fall, the economy has deteriorated. Falling is forced. And it's already hopeless.

For example, in 2000, when the dot-com bubble began to fall, S&P 500 fell by 50% in three years. And in 2007, when the dollar began to fall, S&P 500 fell by nearly 60% in two years. But what is the commonality between these two worlds? The dot-com bubble in 2000 was because many companies were not making money, and the high market value led to the final collapse of the entire stock market.

Then in the second wave crisis of 2007, because there were too many credit loans, because of the lack of return, the capital chain collapsed and the bubble exploded. Their common characteristics are that the basic face has a serious problem. The company does not have a profitable figure to support such a high valuation. Then the borrower does not have the economic foundation to support the ability to pay the loan. So even though the US Federal Reserve realized the seriousness of the problem and began to reduce the policy, it was too late.

Because this pit is too big So the market still needs to digest this pit After that, it will slowly return Let's take a look at the same situation this year The current unemployment rate in July is 4.3% Although it is the new high of the past year But if we zoom out If we zoom in Actually not so bad At least not so bad now

The GDP growth rate is 2.8% in the second quarter of this year If we want to see the economic decline Generally speaking, it is to see the GDP of the two consecutive quarters. It has not been able to grow In the current situation, there is no such sign The most important thing is the company's profitability I just talked about the top and bottom of the stock It depends on the company's profitability Let's take a look at S&P500's earnings

We can see the profit margin of this chart clearly from the profit margin of this chart. The profit margin was down in 2000. It was the same in 2007. Last time was in 2019. It was caused by the COVID-19 pandemic. The profit margin of S&P 500 is still 10% healthy. We can also look at the EPS earnings per share. The second quarter of this year's EPS is 219.

The next prediction is that the price will continue to rise every quarter. So the profit and loss of S&P500 looks very healthy at the moment. The company is really making money. Let's take a look at the performance of S&P500 after the fall of the US dollar every year in the past history.

The blue dots on the picture represent the start of every fall. From this picture, we can see that the performance of S&P500 is mostly not related to the fall. After the only four falls, S&P500 began to go downhill, including the economic downturn of the 1980s, the 2000s dotcom bubble, the 2007 second wave crisis, and the 2019 COVID. Then we look at the other four points of fall. After the fall, there was no fall of S&P500.

So it's still the same sentence, the decline will not cause the stock price to plummet The stock price is falling directly to the company's profit and loss ability We haven't seen any other factors that will affect the company's profit and loss ability yet Instead, in the past year or two, the company's profit and loss ability has been constantly improving And it will continue to improve because of AI So I don't think you need to listen to people talking about the decline on the Internet and the stock price will plummet I don't think there is any need to go and there is no reason to be afraid

and don't care about the price fluctuations in the short term. The short-term price fluctuations are only noise and FUD for me. Since I am a long-term investor, these are good buy-in opportunities for me. Of course, it doesn't mean that we won't encounter a black swan. And you should know that many places are still in war.

The relationship between the Taiwan Strait is also getting more and more tense. Then if the US election is a stock market, I don't know if it will start a trade war again. Anyway, this world will never be peaceful. There will always be some things, there will always be some people out to do things. So the most important thing is to understand and control your risk. Then there is always a part of the cash in your hand. When you are in a hurry or when you can be super low, you can use it. If you want to start investing in US stocks, whether it's big companies or individual stocks, I recommend that everyone can consider IB Intel Securities. I have been an IB user for several years.

I think no matter which country you are in, IB service should be the best. I have met a lot of problems with some discounted accountants who have no fee. And I think they are also one of the safest accountants. Currently, IB has a cash interest rate of 4.83%. Like me, I put most of the cash there to collect this 4.83% interest. Then when there is a time to enter the field, I can directly book a ticket. No need to wait for the funds to turn around, it will take several days. And it is very convenient to enter IB. Like in Taiwan, half a day's time is up.

And the fee for the IBK Pro I shared with you in the previous video Basically low to be ignored directly Then if you have SSN in the United States, you can open the Lite version directly. No fee required at all But I still use the Pro version at the moment Then I will post the link in the information column below the video If you are interested, you can go and see I have helped my parents open a house So if you want to know how to open a house in Taiwan Every step of entry You can leave a message below the video to tell me I can make a complete tutorial video

Alright, that's it for today's video If you think it's helpful, remember to give me a thumbs up Also welcome to leave a comment below the video to share your thoughts If you want to support my channel, you can also go and check out my IB link See you next time