Insight and Opinion

Is it time to buy? the U.S. stock market is at the bottom!

May 13, 2025

Starting in April, there was a sudden decline in the U.S. stock market, causing widespread panic. However, from the first day of the fall on April 3, we at AiF firmly told everyone that there was no problem with the market—it was just shuffling. Now, on May 8th, we at AiF are again assuring everyone that the market has bottomed out.

Is it the time to buy? How do we know that the U.S. stock market has bottomed out, and will start going back up?

The dealer’s signal is clear: the bottom is in — time to buy

This indicates that people are not trading, and that the average investor is holding on to stocks out of trust in President Trump. In other words, individual investors are no longer selling while institutional investors are no longer buying.

Principles for interpreting the news

There are three principles that we follow at AiF to interpret the news.

Follow up on government news
Be cautious of corporate news
Ignore trail rumors

Based on Bessent’s speech, we will cover the first principle—how to follow up on government news, and how to interpret it to know when the dealers are signalling to buy or sell.

Milk in the Great Depression

To understand the current stock market, it helps to look back at the Great Depression. At that time, many dairy farmers chose to dump their milk rather than sell it at extremely low prices. Some took this as a sign of the greed and corruption of capitalism.

But in truth, this had little to do with capitalism itself. Urban demand collapsed—people simply couldn’t afford to buy milk—causing prices to plummet. For dairy farmers, selling at such low prices meant losing money on every bucket of milk. So they went on strike, declaring they would rather dump the milk than sell below a minimum acceptable price.

This illustrates a core principle of any functioning market: no one sells at a loss voluntarily—especially not large-scale players or institutions. There must be both buying and selling for a market to function. But when sellers are unwilling to sell below cost, they simply withhold supply.

The same logic applied to the stock market on April 3. When prices suddenly fell, dealers and institutional players didn’t sell at lower prices—they stopped selling altogether. With no real sell-side supply, the only direction left for prices was up.

In fact, the dealer will often reintroduce a high-priced sell order to re-anchor the market, signaling that the downtrend has ended. This is the first sign of reversal—a quiet but powerful shift in direction.

Speculators

Even with short-sellers and speculators in the market, prices won’t collapse again. Why? Because shorting is still a form of selling. Once a short position is opened and that order is filled, the dealer will often push prices up quickly, forcing short-sellers to cover at a higher price.

This leads to a cycle: the speculator sells low, but must buy back high—losing money. Meanwhile, the dealer profits from this reversal, selling into the rising momentum they helped trigger.

As investment strategist Scott Bessent pointed out, there are barely any active buy or sell orders in the market right now. When liquidity dries up, it’s no longer possible to push prices down through short-selling. The “sell wall” is gone.

As of May 8, the market has not only rebounded, but fully recovered and closed above its April 3 level—a clear technical confirmation that the bottom is in.

Ai Financial’s role

Due to the changes in the entire market, coupled with inflation, we make money at a rate that has been far from catching up with the speed of inflation. Especially since humanity has recently entered the fourth revolution (AI), the wealth of the whole society will undergo a large-scale shift.

By focusing on public capital preservation funds, your money is put into a pool of funds. Through this pool, professional financial institutions (like AiF) will help you flow the funds into the leading sectors of the leading industries and different enterprises.

Live Q&A Highlights

Q: “For the current market, is the short-term rally topped out?”

A: We don’t think the market situation right now is a simple short-term rally.

The U.S. Treasury Secretary has made it clear—the entire market is currently not trading, not buying or selling. As soon as the dealers enter the market, the market will start to rise, because dealers will not sell stocks at a loss.

Q: “Is it too aggressive to enter $200,000 now with 3 to 1 leverage? What if we encounter a ‘black swan?”

A: There is a particularly simple but key principle, called “All in.” When you see the market clearly, you should dare to leverage everything. In my experience, there has never been a ‘black swan’ or ‘gray rhino’ in the market. These are gimmicks rendered by the media and dealers.

Q: “Will the broader U.S. stock market as a whole still be in profit by the end of this year?”

A: Let’s say that we did experience a big drop this year. But looking at the current overall situation, just one month, the broader market has already rebounded more than 10%.

Q: “Warren Buffett invested in Japanese trading companies, but he explicitly said that he would not invest in AI. What do you think about this?”

A: Warren Buffett has emphasized that he only invests in industries that he understands. For instance, Buffet understand Nippo Sharyo, so his investment there aligns with his own personal investment philosophy.

Q: “If the dollar loses its hegemony, will US stocks still be good?”

A: So far, the U.S. dollar has not lost its position as the dominant global currency. So far today, we see that U.S. stocks are still performing well. However, if ever the dollar does lose its hegemony, we’ll come back to that.

Q: “When you guys talk about a ‘long term bottom’, how many years is that ‘long term’, 5 years, 10 years? Or longer?”

A: 40 years, or longer. The “long-term bottom” we are talking about may be the grace that will benefit the next generation for the entire lifetime of our generation, and even after we die.

Q: “Can you share the main reasons for your previous bankruptcies?”

A: The old me had no idea what real investing meant. I was speculating in stocks, and lost my money. Investing is something that you need to validate time and time again, and prove with facts that you can ultimately make money.

Q: “You guys mentioned that ‘inertia eventually goes away—can you explain that?”

A: The world is full of external forces all the time, whether it’s policy, economic events, geopolitics, or market sentiment, and they all have an impact on trends. With enough external forces, market trends and inertia will naturally change and disappear.

Q: “What do you guys think about the likelihood and timing of a recession in the U.S. in the near future? How will this affect U.S. stocks?”

A: From all the data we have, there is no indication of an imminent recession in the US.

The current facts and figures, not only do not point to a recession, but clearly show that the U.S. economy is performing very well.

Q: “How many points will the U.S. stock market rally to?”

A: We know that the stock market is always going up and down, it will not go up forever, nor will it go down forever.

Q: How much time will it take to rally to a certain point?

A: We have not and will not do this kind of prediction. We only look at the general trend and direction.

In terms of trends, the whole market is definitely going to make new highs. For example, we believe that the 45,000 points of the Dow Jones will be broken. However, there are too many external factors to pinpoint when the breakthrough will occur.

Q: “I’ve heard of people speculating in their TFSA accounts and making millions of Canadian dollars, is that true?”

A: Once you really enter the market, you will naturally understand what is going on. It is important to not be fooled by the news media, as the news requires eye-catching headlines.