What if I told you the stock market just crossed the $150 billion threshold? A number so massive, it’s only been hit once in the last decade. And if it’s making you feel excited, maybe you need to reconsider your excitement. This money is flooding into the U.S. stock market ETFs, as the S&P 500 is up over 26% in the year of 2024. Probably, most investors are popping champagne. https://youtu.be/b36hBrseB0Q
But I’ve got some bad news for any of you that have been doing that: The market’s P/E ratio (the price-to-earnings ratio) is now in the 90th percentile of the last 40 years, as you can see on this chart. To make it simple, the market has never been this expensive. And if you think that sounds familiar, it’s because it is. The last two times we saw similar numbers were back in 2021—right after stocks became expensive, the market dropped by 28%. And the last time was in the early 2000s when the market dropped by 40% once stocks became too expensive.
And here we are again, flirting with that exact area. Analysts, experts, and headlines are calling this an “irrationally exuberant market.” But while most people are biting their nails, praying the bull market doesn’t turn into a bear market, smart money is already baking in the reality of a bear market and moving out into cash.
We all know markets are crazy, and a lot of people think they’re unpredictable. But remember Alan Greenspan back in 1996? He called the market “irrationally exuberant.” What did the S&P 500 do right after his big warning sign? It doubled in price over the next three years, only to crash later, as you can see in this chart. Fast forward to 2024, and this setup is extremely similar: $150 billion is pouring into the market, market valuations are at record highs, and analysts are yelling “danger ahead.” But here’s the truth: The market doesn’t care about analysts. It cares about momentum, and right now, momentum is king.
The question isn’t will the market crash. The question is, are you playing the game right? Here’s why most people will lose money in this market: They panic, sell too early, and are too afraid of a crash. They FOMO (fear of missing out) and buy at the peak, chasing the hype. They guess, and they don’t know what they’re doing. They don’t have a strategy—they’re just gambling.
Now, smart money, on the other hand, has already made its move: diversifying into crypto, emerging markets, and commodities. They’re riding the momentum in utility stocks like uranium, and most importantly, they’re using systems, not emotions.
If you’re relying on your gut to make decisions, you’ve already lost. The market is cold, calculated, and ruthless—and that’s exactly how you need to be if you want to win.
Now, there’s one thing that could derail this entire market. In fact, it’s the elephant in the room that certain analysts have been screaming about: a recession. How can we tell a recession is coming? There are two key indicators:
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- Jobless claims, being the first. When they spike, a recession is usually just months away. Right now, claims are flat, so there are no red flags yet.
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- The yield curve. Every time this curve inverts, job losses follow. It’s not if, but rather when. For now, the economy looks stable. But when I say “stable,” you have to understand that a lot of the data that comes out is skewed to leave out information to make the numbers look good to the public. I’ve covered this in a video before, discussing the CPI (Consumer Price Index) and showing you exactly how they eliminate certain numbers to make it seem like things are better than they actually are.
So, what is the smart money doing in 2024? Here’s exactly how pros are playing this market:
They’re riding the momentum. We all know where the momentum is right now—crypto is extremely hot. But they typically will only trade when there’s momentum. And earlier, you heard me mention utility stocks. They’re one of the only sectors priced fairly, the technicals are beautiful, and they’re diversifying globally: Turkish stocks, Malaysian markets, and even uranium miners. Because typically, the best opportunities are in places where nobody else is looking.
Also, the smart money is not guessing—they’re following a proven strategy using data, not emotions, to make their next move. For instance, the most profitable hedge funds and firms of all time have been using systems to trade for them. And in fact, I’ve been using a system in my own portfolio. If you want to see the performance, you can just watch this video right above. It hasn’t even been a year since I started this account, and I’m already up over 30%.
The crazy part? None of it really took any of my effort. It’s a pretty seamless software that you attach to your brokerage, and this allows some trading in your portfolio to be completely emotionless—just like the market. It’s based on a system that has been proven and backtested for many years to ensure it’s making the right decisions.
And when I say smart money is using systems, this is exactly what I mean. They use these systems inside their firms and hedge funds to generate yield for their investors, regardless of what the market is doing.
If you want to know more about these systems, on December 18th, there’s going to be a webinar where you can join and ask any questions you like. You’ll find out exactly how this could potentially fit inside your portfolio to help you moving forward into 2025 and beyond.
If you’re interested, just hit the link down below, and I hope to see you there!
