Meet Kevin: Prepare: The Market Will Flip Here

The economy continues to show weakness thanks to a variety of reasons. There’s the ongoing slowdown from rapidly-rising interest rates. Inflation is weighing on investor activity, and supply chains remain out of whack over two years since the initial Covid shutdowns.

While these unique challenges will be dealt with in time, there’s a rising chance that we haven’t seen the final drop in markets for this cycle.

Historically, the post-midterm period is great for stocks. Especially when there’s any sort of political gridlock to prevent any single political party from dominating politics.

Between now and the next year, a gridlock outcome tends to lead to 19 percent average return higher. However, this year’s cycle may be broken in part due to high inflation.

The real item to track then would be peak inflation. Should we see that in the coming months, markets should also rally based on historical trends.

However, until that happens, there’s likely some downward pressure on markets. But investors who look for a peak in inflation can likely buy close to a market flip off of its bearish course.

Besides the stock market, peak inflation is also great for bonds. The historic return over 6, 12, and 24 months can be strong. That’s thanks to rising bond prices as interest rates stop rising and investors lock in a strong return.

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