Things aren’t looking too good on Wall Street.
The banking sector’s relative performance to the S&P 500 is at its lowest since the regional banking crisis of 2023.
Source: Stockcharts.com
With home sales slowing and the Fed dousing hopes for interest rate cuts last week, banks are scrambling to make up the money somewhere.
What better place than the American investor?
After all, we are the perfect patsy.
What else explains how hedge funds and institutions control trillions of dollars, yet 80% underperform the market annually?
However, the lies they introduced this year could be their most devious yet.
Millions have already followed the white rabbit into a wonderland of nonsense.
They’ve built their retirements on a foundation of garbage that will eventually collapse, leaving them with nothing.
Maybe it’s time to take a different route.
We’re going to shed light on three of Wall Street’s biggest lies below. Our goal is to help you see what they are and how to avoid them.
Lie #1: Fed Rates Matter
As far back as most of us can remember, there’s been one single truth to investing: “Don’t fight the Fed.”
When interest rates are low, stocks go up.
When interest rates are high… stocks still go up?
It sounds kind of dumb when we lay the truth out like that.
The market doesn’t care what interest rates are.
It cares about what they will be.
The Federal Reserve has telegraphed its moves as far out as possible since Ben Bernanke. In the depths of the Great Recession, when so much was unknown, it made sense to remove uncertainty.
Now, it means the actual interest rates don’t matter to investors as long as we aren’t surprised. Markets cratered in late 2018 because the Fed caught everyone off guard with their interest rate hikes.
All of this comes with the caveat that their rates are within reasonable tolerances.
Do you think it actually matter whether the borrowing rate is 5.25% or 5.50%? Heck, it doesn’t matter if it’s 4.50%.
That’s all largely rounding errors.
There IS a big difference between actual rates at 0% and 5% and even 5% and 10%.
But in between, all that matters is the market’s perception of interest rates.
Lie #2: Our Market is Healthy
Earlier, we showed you a graph of the relative performance of the banking sector to the S&P 500.
This is the relative performance of the S&P 500 Equal Weighted Index to the S&P 500 going back more than a decade.
Source: Stockcharts.com
The current underperformance of the broader market hasn’t been this bad since the Great Recession.
And since 2017, it’s been in a perpetual decline.
We don’t have to tell you that technology stocks have broken away from the rest of the market.
Plus, the financial sector isn’t the powerhouse it was before 2008.
Yet, the performance problems normalized in the post-pandemic era until 2023.
Since then, tech companies have grown while everything else has stalled.
This is a long-term problem and extremely acute in retirement accounts.
How many of you own market-weighted indexes as a core part of your portfolio?
This isn’t necessarily a bad thing when stocks are more level-set.
However, we’re at a point where the frothiness will blow up, or the rest of the economy will eventually drag them back to Earth.
Here’s a big reason why.
Lie #3: The Artificial Intelligence (AI) Revolution is Moments Away
Just the mere mention of AI is enough to send shares of any stock soaring.
Demand for Nvidia’s AI chips is expected to double this year after doing the same last year.
However, there’s a problem.
We touched on this in last week’s newsletter, highlighting the enormous power consumption demanded by these data centers.
AI computations require a level of infrastructure we simply don’t have.
Yet, it’s more than that.
The current AI chips can’t physically perform the way we need them to.
George Gilder calls this The Big Lie.
Current technology no longer follows Moore’s Law, where speed and performance double every two years.
We’ve hit the physical limitations of what our materials are capable of.
To compensate, companies string together multiple CPUs and GPUs in cloud centers, which will work for a time.
Yet, if we want to reach the next level of technology, particularly quantum computers that could take AI to Star Trek levels, we need new microchips.
None of the big names in most retirement portfolios even touch on this subject, let alone are actively working to make it a reality.
Chances are, they make up a huge portion of your portfolio as well.
When they peter out, you’ll be left with a gaping hole in your retirement.
But you don’t have to fall victim to their deception.
While Wall Street clings to yesterday’s tech, one visionary sees the path forward.
George Gilder, the celebrated futurist who called the iPhone, Netflix and Amazon decades early, has found the missing piece to the AI puzzle.
A tiny company, trading for just $1, holds the key to powering true AI.
Their breakthrough graphene microchips are set to revolutionize not just computing, but every industry touched by this technology.
And for a short time, George is pulling back the curtain on this company for individual investors like you.
As part of a risk-free trial of Gilder’s Moonshots, you’ll get the name and ticker symbol of this stock, plus a deep dive into George’s entire model portfolio.
This is your chance to break free from Wall Street’s echo chamber.
To position yourself for the tectonic shifts ahead.
And to ride the graphene boom to potential 10X gains.
Click here now to watch George’s urgent briefing.
See the proof for yourself.
And decide if you’ll let Wall Street’s lies shatter your retirement dreams…
Or if you’ll seize control of your financial future before it’s too late.
