Editor's note: Don't let the passing storm clouds ruin your portfolio...

Many investors fled the markets over the past few years as sky-high inflation and geopolitical conflict weigh heavily on several important asset classes. But according to Marc Chaikin – founder of our corporate affiliate Chaikin Analytics – the market still offers solid buying opportunities for investors who know where to look...

That's why Marc believes it's crucial for folks to remain patient and avoid letting fear guide their investment decisions throughout this bear market.

In today's Masters Series, originally from the March 16 issue of the Chaikin PowerFeed daily e-letter, Marc talks about the Fed's strategy for combating today's out-of-control inflation... explains why uncertainty continues to fill up the markets... and details how investors should navigate this ongoing turmoil...

The Fed Got What It Wanted

By Marc Chaikin, founder, Chaikin Analytics

The Federal Reserve's war against inflation took a wild turn over the past week...

In this war, the Fed has taken an aggressive approach. The central bank has raised its key short-term federal-funds rate an unprecedented 475 basis points over the past 12 months.

And a few weeks ago, Fed Chair Jerome Powell said more interest-rate hikes were in store.

Then... something broke.

Powell quickly walked back his statement when both stocks and bonds sold off sharply. And by now, you likely all know what happened next...

The stage was set for a 48-hour run on Silicon Valley Bank. Through a lack of risk management and hubris, the California-based bank was unprepared for massive depositor withdrawals.

The stunning collapse of the 16th-largest bank in the U.S. has thrown a gut punch into the stock market. And it caused volatility to spike recently...

The Chicago Board Options Exchange's Volatility Index ("VIX") is a popular measure of market volatility. It's often referred to as the "fear gauge" for stocks.

When the VIX is high, it signals that uncertainty in the market is elevated. And when it's low, it indicates that investors aren't too worried about the market.

A few weeks ago, the VIX was below 20 – which is relatively low. But after Silicon Valley Bank's collapse, it surged. It climbed to as high as nearly 30 in the following days.

Now, the Fed faces a serious problem...

The Consumer Price Index ("CPI") and Producer Price Index ("PPI") numbers from January suggested that the Fed had more work to do to rein in inflation. But its primary weapon in that war – persistent rate hikes – has now put our banking system's stability into question.

Meanwhile, the stock market remains uncertain...

It's worth noting that the S&P 500 Index is still up around 3% in 2023. It started the year at around 3,840. And as you might recall, it closed as high as 4,179 in early February.

Despite all that, inflation is still the driving narrative behind our economy.

The February CPI and PPI reports came out earlier this month. And the data was mixed...

It showed a 6% year-over-year increase for the CPI. That's down from 6.4% a month ago.

Meanwhile, the PPI clocked in at 4.6% over the previous year. That's down from a 5.7% year-over-year increase in January.

So these reports didn't come in "hotter" than expected. But inflation is still running a lot hotter than the Fed wants. And that led to a "restrained" 0.25% rate hike from the Fed during its latest session.

Here's what everything means for us...

Investors should expect heightened volatility in the weeks ahead. The stock market is still sorting out what higher rates mean for the economy and the banking system.

And importantly... our "bullish" market thesis isn't dead – it's just derailed.

As the events of the past week have unexpectedly unfolded, it has led to elevated fear and panic in the market – particularly in the financials sector. Comparisons to 2000 and 2008 are everywhere, with dire forecasts running rampant in the media.

But notably, stocks are still well above their October lows. So with panic in the air, now might be a good time to heed the advice of legendary investor Warren Buffett...

"Be fearful when others are greedy... and greedy when others are fearful."

Throwing caution to the wind is never a good idea. But I've often seen fear trap investors as the pendulum swings back to greed. And we don't want to get trapped.

Put simply, the Power Gauge still sees numerous "bullish" and "very bullish" opportunities in this market. And as always, I'll use it to help me find and act on those opportunities.

Good investing,

Marc Chaikin

Editor's note: Marc predicted the February sell-off... and the recent banking crisis – months before it happened. And now, he's stepping forward to share an urgent warning about what's coming next for the stock market in 2023...

Marc is hosting an online presentation on March 28 at 8 p.m. Eastern time to reveal the one step investors must take in order to protect their wealth moving forward. Click here to get the full details...