The rating agencies Moody's has just cut us government rating quality. And you probably already know about this. Everyone's freaking you out about it. This is the beginning of the end of the market. Is everything going to crash and all that sort of thing? And the truth couldn't be further from that. Now, there are certain sectors of the market that are going to get hit by this. There are certain sectors that won't be. And I want to show you exactly what happened last time this happened because this isn't the first time. In fact, every other credit agency already has this lower rating that Moody's now has. So Moody is actually just following the crowd. So my goal here is to remove the FUD, the fear, and show you the opportunity instead. So let me share my screen with you. Here's the announcement from Reuters cuts America's pristine credit rating. Well, this was the last pristine one left. And why is it? Well, the US has got a $36 trillion debt pile, which is kind of like bonkers. It's kind of unsustainable. It costs a trillion dollars a year to maintain and you don't really need to know all the details. This is the problem. So, the US 10year Treasury yield is how much the US government is going to pay essentially for debt. And it's sitting at about 4.5% which is not far off where it was in 2008, global financial crisis. There's a helicopter coming. I think they're finding me. Um, and someone's taking the shortcut to his yacht via helicopter. Sorry for the racket there above. Um, Trump wants to get this down. How do you get it down? Well, you could cut interest rates. The Fed isn't budging. Or you could give the market the impression you're going to create less debt. If you do that, it's also going to come down. So, this downgrade is really, really unhelpful because it says to the world, US debt is a little bit more risky. you should ask for a higher premium and therefore interest rates are actually going to go up and that isn't good for the US debt pile or for the US economy. So yes, there is an impact. Now we've seen this play out before. 1st of August 2023, Fitch did the same thing. Fitch is another rating agency. Uh another one of these lovely people who just care deeply about the American consumer and uh will underwrite anything if you give him a nice big water cash. Did I say that? I didn't mean that. I must have been thinking about something else. So, what was the what was the reaction last time? Well, we dropped about 10% on the S&P. Okay. And then we inevitably recovered. What about tech stocks? The more risky stuff. What did we do last time we got this kind of downgrade? Well, we dropped about 10%. Same thing. So, what about my favorite tech stocks, the magnificent seven? You know, your Microsofts and Apple and so on. Well, how much did they drop? Not that much actually. They went down actually no 12%. So tech a little bit more impacted right. But what's actually going to get hit by this isn't Microsoft or Apple or even you know any of that stuff particularly it's the Kathy stocks the ARC stuff because that my friends went down 30%. So, if you have a portfolio in like kind of high risk tech stocks, all innovation, they might get hit fairly hard by this. And I'll ask you why. Well, the reason is quite simple. The reason is simply that they often need debt to survive because they're not yet profitable. And therefore, if debt prices go up, that's a problem. Uh, which is what interest rates are, right? The cost of of of maintaining debt. And also their valuations are tied to how big of a difference is there between the return I can make with this and government bonds. Now if government bonds pay me 5% rather than 4%. That's like a risk-free return compared to the really risky return I could make with like an ARC innovation ETF. So if you're heavily in this stuff you're going to see some moves. But if you also zoom out a little bit afterwards, you can see we recovered pretty nicely um into the end of the year. It but it took you know 66 bars is about 3 months. We went down for about 3 months and then we recovered very nicely. So it might generate some nice big new buy the dip opportunities. I don't think it's the end of the world. The US government isn't going to go bankrupt anytime soon. Yeah, they got to get the debt stuff sorted out. They got to get the tax bills sorted out. They got to get the tariffs sorted. There's a lot of stuff to get sorted out. This in itself is just going to cause a little bit of a temporary emotional wobble. Uh and and what do they do for us wobbles? Well, they create new opportunities. But I'm still going to implement my risk management. So, if we go down, I'm going to get knocked out of by all of these positions through my stops. And those stops are mostly going to take profits at this point because we've had a really, really nice couple of weeks here. So, focus on your risk management. Don't let yourself get dragged back down to the dark place that we were in a couple of weeks ago. and and and just use it as a moment to learn because this pain is going to keep coming uh unless you have a system, unless you have rules that automatically take care of your risk. If you want to learn that, go to phoenixpens.com/getfree. It's my whole mission here to make a million people financially free so you can enjoy the beautiful world and do something happy and meaningful. So, I hope that gave you some clarity. If it did, share it with a friend. Let me know down below in the comments. And I wish you all the best. Felix here. And if you're worried what your favorite tech stocks are going to do this coming week, given the US debt downgrade we just got in, markets are tanking after hours, then this is the right video for you. And no, it isn't going to be all doom and gloom, but it'll give you a much better understanding of where we stand, where we might want to exit, where we might want to buy more of the dip that might be coming.