I’m waiting to invest until… (URGENT May Stock Market Update)

A lot has happened in the last couple of days that's made the stock market shoot straight back up. The S&P 500 has actually come back so strong that it's actually positive for the year already. This week, President Trump told the U.S. that stocks are about to go even higher. Last time he said that, the next couple days had a crazy high surge in the stock market. Many are wondering if now is the time to get back into the stock market or get left behind. In this video, I'm going to explain why the stock market is up and when to expect another dip. And then also, if I had an extra $1,000 to invest each month, I'm going to break down exactly how much dollar amount that I would put into each fund or each stock and I'm going to break that all down for right now in May 2025. I'll also be explaining when exactly I'm waiting to invest until and what signs I'm looking for to show me that we're firmly back in a bear market. My name is Nolan Govea, my students call me Professor G, and I made this channel to make investing simplified. So like I told you all last year and at the beginning of this year, 2025 is going to be quite volatile. When the first couple big announcements about tariffs came out, the stock market was sent plummeting down. Then Trump put a 90-day pause on the tariffs and I told you that this was a strategic move for all parties. I knew that during this time, negotiations were probably going to be made. I just didn't think it was going to happen this fast, specifically with a huge player in China. But let's not get ahead of ourselves. Every day there seems like there's good news in the market and then the next day there's bad news and sometimes there's good news at the beginning of the day and bad news at the end and maybe good news to end the day. It makes it so hard to know exactly when to invest. There have been some major developments lately that you need to understand that have led to this recent stock market boom. But we also need to keep in mind that this may just be a false positive and that all of this is just a huge amount of hope. The investor needs to be very careful right now. The chairman of Kava explained a very important point in this very short clip. So few people seem to understand the consumer, the eater, as well as you do. Can you give us any granularity about what you think is going on with the economy right now? Like softness, strength? We're entering stagflation. I mean, it's very clear if the recession isn't here, it will be here. You've got tariffs which are going to implicitly be a price increase. They're going to get reflected. They're going to slow down growth in some form or another. You also have immigration that's occurring that is going to diminish the supply of labor. You're going to have the pressure, the lesser immigration, you mean it's going to put pressure Well, it's going to diminish the supply. Immigration is going to diminish the supply of labor. The result is going to be there are less people. It's going to drive up wages. Many big economists and CEOs like Jamie Dimon have increased their worry on a likely recession coming as well. So then why is the market up so much right now? The first thing that made the market take a huge turn upward was when that first piece of good news came out that the U.K. and the U.S. made a trade deal and compromised on some new tariff situations that will ultimately help the U.S. dramatically. This stopped the market from a free fall and actually shot some hope and optimism into the stock market. The big reason, though, that the market climbed recently is the China deal that just happened. U.S. stocks surged on Monday after President Donald Trump's top trade officials brokered a surprisingly dramatic de-escalation in trade tensions with China over the weekend, dropping tariffs to much lower levels, which some economists say could stave off a U.S. recession. The Dow closed higher by 1,161 points. The broader S&P 500 gained 3.26 percent and the tech-heavy Nasdaq surged 4.35 percent. The three major indexes each posted their biggest single-day gains in over a month. This is the one that really made the market rise strong. Both sides agreed to ax tariffs by 115 percentage points, still leaving the levies considerably higher than they were before Trump took office in January, but much, much lower than the historic level over the past month that deeply concerned American businesses, consumers, economists, and investors. Another key element of the discussions? Besent said that the U.S. and China had put in place a mechanism to avoid raising tariffs on each other again, suggesting that the worst of the trade war may be behind us. That's a huge piece, because up until this point, people have been saying, well, we're just going to keep raising, and then China's going to keep raising, and then we're going to have an all-out trade war. But it seems like negotiations are going well in that regard, and I expect other countries to follow suit. There's optimism floating out there amongst the icebergs of uncertainty that the president won't let this get out of hand and throw us into a recession. We have to realize that the uncertainty has not been totally cleared away. We can breathe a sigh of relief because we have now another 90-day pause period. Then what just happened this week was a bunch more good news, showing that inflation has actually dropped. April inflation report shows that prices grew at the slowest pace since 2021. The Consumer Price Index, which tracks a variety of costs throughout the economy, rose 2.3% year on year in April. The Bureau of Labor Statistics reported Tuesday down from 2.4% in March. So with good news, as far as negotiations seemingly going in the right direction, that trajectory looking like it's going positive. And then with inflation cooling, all that needs to happen for us to enter a full-blown bull market is for the Fed to actually start cutting the rates. As soon as the Fed cuts rates, usually stock prices go up, and so does the economic activity because now money is a lot cheaper, businesses can borrow at better rates, and people spend money more freely, which makes the economy go much better. Unfortunately, this is the biggest clue that shows me that we're not as close to that new bull market as I had originally thought, or as these types of good news things kind of are trying to show us. There's just no expected Fed rate cut in sight. Looking at the CME Fed Watch, most believe that we will not see the Fed cut the rates at the next meeting in June. Over 90% believe the rates will stay in that 4.25% to 4.5% range. It's not until September that most believe we'll see a noticeable cut. Among other headwinds are weaker expected economic growth, lower corporate profits, and a likelihood that the Federal Reserve could be slower to lower interest rates if tariffs don't pose an imminent recession threat. Traders push the next Fed rate cut further out now to September, with only two reductions expected by the end of 2025, which is down from the three cuts predicted. The latest inflation reading is likely a welcome reprieve from the Fed, however the larger tariff-related price adjustments are likely to come over the next few months, Goldman Sachs analysts said in a note to clients. This is a big deal and a lot of people aren't understanding that the tariffs that went into effect in March and in April or so are definitely not going to be shown on the inflation report so quickly. That type of thing isn't going to actually show for another couple of months to see what actually happened because of those tariff scares. In all honesty, a lot of companies and even consumers bought a bunch ahead of time as soon as the tariffs were announced to try to get out ahead of those tariffs raising prices down the road, and so consumer spending looks like it's up and inflation looks like it's down for now, but that may be skewed and that's very important for you to understand. Consequently, we'll still anticipate them remaining on the sidelines in the near term. The White House's back-and-forth tariff announcements are likely to have a whipsawing effect on inflation readings for months to come. A clear read on the inflation trend won't be visible for several months yet. This prolonged inflation uncertainty likely implies a prolonged Fed pause. So with all this information, I'm going to give you a breakdown of if I had $1,000, what I would invest in now in May of 2025. But first, this is the sign that I'm waiting for to show me that we are in a bull market and this sign is going to be coming from the Fed. I believe that the Fed is the most important indicator to let us know if our economy is positive or negative or going well or not. No matter what the president says, or powerful CEOs, or chairmen, or board members say, it's the duty of the Fed to keep America safe as far as financially, especially long-term. The Fed's duties can be further categorized into these four general areas. Implementing national monetary policy by influencing monetary and credit conditions in the United States economy to ensure maximum employment, stable prices, and moderate long-term interest rates. Supervising and regulating banking institutions to ensure the safety of the U.S. banking and financial system and to protect consumers' credit rights. Maintaining financial system stability and containing systemic risk. Providing financial services, including a pivotal role in operating the national payment system, depository institutions, the U.S. government, and foreign official institutions. The most important of those is maintaining financial system stability and containing systemic risk. If the Fed has not yet decided that it's time to bring down or ease the fiscal policy and actually bring down the rates, then we're not out of the woods yet. I've been telling my clients that as soon as we see two consecutive Fed rate cuts, and especially if they're close together, that's when we know that we're truly moving towards a real bull market. The Fed won't do these cuts until they're absolutely certain that inflation won't rise again, because if they cut and inflation rises real quickly, that's not going to look good on them, and also they're going to have to raise rates double as fast, and that won't be good for anybody. So for the vast majority of the rest of this year, at least until September or maybe even later, I expect volatility and I expect there to be dip buying opportunities. For right now, if I have $1,000 to invest, I'm still dollar cost averaging with the vast majority of it because I know five years from now, this craziness in 2025 will be a blip on that graph and will be much higher than we are today. My first $300 would go straight into VU for the S&P 500. My next $200 would go into QQQM or SCHG for a solid growth ETF, knowing that technology and AI is only growing more and more. My next $200 would go into SCHD because I love the dividend growth and it's always smart to invest in more value style companies to keep the risk lower in the portfolio. Then with $100, I'd invest in whichever stock or two that I see as a good opportunity. Right now, I love Berkshire Hathaway, but then also I like taking in a bit more risk with Palantir, Google, and SoFi. With the remaining $200, I'd be stashing it in a money market account waiting for that next dip that I know is coming soon. With another big 10% plus dip in the coming months, I'd use up all of my reserve money that's sitting there in my three fund portfolio that I go over in this video and I talk about specifically the percentage based on your age because it changes based on how old you are. Or you can watch this video to keep you going strong in your investing journey. Remember to keep investing simplified.