I wouldn’t blame you for being frustrated with stocks right now. The seesawing equity markets are disappointing bulls and bears alike. But I would blame you, if you threw in the towel and sulked on the sidelines. As I like to tell my seven-year-old twin grandsons, there’s no crying in baseball.

Portfolios took a hit in 2022 but cheer up. History shows that the S&P 500 rarely declines two years in a row. When we’ve inevitably gotten through the Federal Reserve’s rate tightening gauntlet, investment opportunities will explode on the upside, especially in artificial intelligence, electric vehicles, the Internet of Things, and other once-in-a-generation megatrends.

Now’s a good time to draw up a shopping list of “dream stocks” that were too pricey in the recent past. Consider buying on the dips. In the meantime, stay patient…and stay in the game.

Read This Story: A “Pure Play” on Artificial Intelligence

After a sizzling start to 2023, stock markets are volatile and trying to regain their footing. The CBOE Volatility Index (VIX), the so-called “fear index,” hovers at about 21.

When the VIX surpasses 20, you can expect greater than normal volatility over the next 30 days. This level of the VIX is typically caused by market stress such as we’re experiencing now due to inflation and Federal Reserve tightening.

Bond yields remain elevated, with the yield of the benchmark 10-year Treasury trading at around 3.95%. Because of recent bad news on inflation, fixed-income investors have started to price in a higher Fed rate for the rest of 2023, pushing yields higher and bond prices lower.

The main U.S. stock market indices closed in the green Monday, bouncing back from last week’s selloff. However, the indices closed mostly lower Tuesday, as follows:

• DJIA: -0.71%
• S&P 500: -0.30%
• NASDAQ: -0.10%
• Russell 2000: +0.04%

The four averages finished lower for the month of February.

Liquidity is drying up, as the Fed tightens the spigot. The latest data for M2 money supply, released Tuesday, showed a negative growth rate of -1.7% for January compared to a year ago, the largest year-over-year decline on record. The trend is a headwind, because liquidity is the lifeblood of the stock market. And so the volatility continues.

Optimism across The Pond…

International stock markets are actually outperforming U.S. stocks, with European equities in the vanguard. It seems counterintuitive, given geopolitical uncertainties and rising great power rivalries, but Europe is home right now to many appealing bargains among transnational blue chips.

Despite the increasingly bloody Russia-Ukraine war, the European Union’s economy has remained on a growth trajectory. Erstwhile major consumers of Russian oil and gas, such as Germany and France, have successfully resisted Russian President Vladimir Putin’s energy blackmail by finding alternate sources of energy.

I still expect inflation to fall this year, but not in a straight line. A major disinflationary trend has been the decline in crude oil prices (see chart).

The prospect of the Fed staying “higher for longer” is bearish for oil demand, because rate hikes undermine economic growth.

Also weighing on crude oil prices was a recent report from the U.S. Energy Information Administration (EIA), which showed a crude oil inventory build of 7.6 million barrels for the week to February 17. At 479 million barrels, U.S. crude oil inventories currently hover above the five-year average for this time of year.

Oil could soon rebound, though, as the Chinese economy gets back on its feet. China has rolled back its strict zero tolerance COVID policies, which should in turn kick start the world’s second-largest economy. China is expected to import a record amount of crude oil in 2023.

To be sure, we’re getting hints that we’ll see green shoots of economic growth later this year. Small-cap stocks have been outperforming, suggesting that investors are still willing to shoulder risk.

If you’re looking for profit opportunities with reduced risk, I suggest you consider the advice of my colleague Dr. Joe Duarte.

As chief investment strategist of our premium trading service Weekly Cash Machine, Dr. Duarte leverages a “fear-based” algorithm that uncovers instant cash codes that could generate up to $1,600 per week in extra income, regardless of Fed policy, the path of inflation, the Russia-Ukraine war, or other adverse macro trends. Click here for details.

John Persinos is the editorial director of Investing Daily.

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