As Wall Street’s S&P 500 reached its first record close in more than two years Friday, I feel compelled to issue fresh warnings to investors.

The large-cap benchmark index finished at 4,839.81 Friday, surpassing the prior record close of 4,796.56 reached on January 3 2022.

But with the S&P 500 topping 4,800 for the first time in its 66-year history, it’s all-too-easy for investors to become overly confident and complacent.

I would suggest that they need to exercise caution and avoid unnecessary mistakes due to said complacency which could, unfortunately, prove to be extremely costly.

There are for me two key takeaways from Friday’s record S&P 500 highs.

First, markets are getting ahead of themselves. Much of the frenzy is being driven by hype that the Federal Reserve is about to start cutting rates after the most aggressive tightening agenda in generations.

While this may be the case, it cannot be stressed enough that although inflation is certainly down from the multi-decade highs, it remains sticky.

Is there really enough evidence for the Fed to pivot? The jury’s out.

Also, the central bank officials are likely to be watching this surge with a degree of angst.

What will happen to markets, they will be asking, when they do eventually cut rates?

Second, tech stocks are driving early year gains.

For me, this is further proof that investing in technology stocks, particularly those related to artificial intelligence (AI), has become imperative for investors aspiring to build long-term wealth.

The rapid evolution of the tech industry has transformed it into a driving force behind global economic growth.

Companies leveraging AI technologies exhibit a competitive edge, leading to increased profitability and sustained growth. By investing in AI, investors will be aligning themselves with the forefront of innovation, capitalizing on the transformative power of intelligent automation, machine learning, and data analytics.

Plus, the scalability of tech companies allows for exponential growth and, in addition, tech stocks can often provide a hedge against economic downturns.

Recently, I told the media that with the ongoing lack of clarity from major central banks, including the Fed, I would not be surprised to see markets falling into correction territory this quarter and as such, “investors should buckle up for turbulence.”

A correction is typically defined as a decrease of at least 10% but less than 20% from the most recent high. Corrections are a common occurrence in financial markets and are considered a natural part of market cycles.

However, a potential correction could provide investors with even more opportunities to build wealth, with the right advice.

Corrections help markets maintain a balance by preventing excessive speculation and unsustainable price increases. They provide an opportunity for overvalued assets to readjust to more reasonable levels.

In short, investors must be cautious regarding the hype surrounding the S&P 500’s record highs.


London-born Nigel Green is founder and CEO of deVere Group. Following in his father’s footstep, he entered the financial services industry as a young adult. After working in the sector for 15 years in London, he subsequently spent several years operating within the international space, before launching deVere in 2002 with a single office in Hong Kong. Today, deVere is one of the world’s largest independent financial advisory organizations, doing business in 100 countries and with more than $12bn under advisement. It specializes global financial solutions to international, local mass affluent, and high-net-worth clients. In early 2017, it was announced that deVere would launch its own private bank. In addition, deVere also confirmed it has received its own investment banking license.

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