Blog2021-10-13T18:04:47-06:00

Let Your Winners Run

Monthly Outlook: March 2024 The rally off the October lows continued through February and nearly every market is trending higher (above its 200-day moving average price trendline). As a result, we remain “all in” for growth and have less than two percent in Cash. Our portfolios under management are up 9% to 16% since October, depending on which allocation model they’re in. That’s in line with market benchmarks, too, so we’re capturing all the gains that the markets have to offer. As the common wisdom goes, “Cut your losers quickly, and let your winners run.” We’re doing that. The economy, and the markets as a reflection, are in a sweet spot for now. Yes, the Federal Reserve has hiked interest rates from 0% to 5.25%, which hurts borrowers. But it’s working to gradually quell inflation (CPI is down from 10% to 4%) and stabilize prices. Earnings are still good with [...]

February 29th, 2024|

The Rally Continues – We’re Making Money

Monthly Outlook: February 2024 It’s been a terrific three months in markets. And we’re talking all markets, Bonds, US Stocks, INTL Stocks – they’re all trending higher. As a result, we’re still “all in” for growth and our portfolios are up about 11% over the past several months. Investors seem optimistic about the potential of AI (artificial intelligence) and the hope for interest rate cuts. And so far, the economy remains fairly strong and corporate earnings are still growing. So up, up we go! Last year, Technology, Communications, and Consumer Cyclicals were the super-star sectors of the market. We call them “US Growth”, collectively. And just seven stocks, the “Magnificent Seven” contributed about 73% of the total S&P500 return. Already this year, we’re seeing a broadening out of returns as other sectors (Financials, Healthcare, Energy, etc.) and other markets (Bonds, US Value, and INTL) are trending higher, too. We wouldn’t [...]

February 1st, 2024|

2024 Outlook: Bullish, Bearish, and Confident

Monthly Outlook: January 2024 As we embark on another year, we first must get through the countless predictions and forecasts. John Kenneth Galbraith said, “There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.” Similarly, Yogi Berra said, “It’s tough to make predictions, especially about the future.” All kidding aside, everyone knows that most forecasts are wrong, and sometimes very wrong. But it’s just too irresistible to try, and we seem to be hopelessly addicted to people who claim they can see the future. Take, for example, the Barron’s Roundtable “Year Ahead Outlook.” Twelve leading strategists from major Wall Street firms are interviewed, and their year-ahead stock market and interest rate forecasts are recorded. It’s laughable how wrong they are, year after year, but the survey sure sells newspapers! Not to be outdone, we offer our own 2024 Outlook, below. Unlike most, [...]

January 2nd, 2024|

Markets Surged in November. Trends Back Up.

Monthly Outlook: December 2023 The Santa Claus Rally came early this year with nearly every market surging higher in November. Just last month, our Outlook title was “What’s Up? Not Much.” One month later, we’d have to answer, “Everything!” US Growth & Value, INTL, Emerging (except China), Bonds – they’re all trending higher again. Even the Israeli stock market turned back up, despite the on-going conflict, and is higher than it was pre-war. So, why the surge? It seems investors are increasingly confident that the Fed and other central bankers have completed their interest rate hikes and monetary tightening. The idea is that lower interest rates in 2024 will support higher financial asset prices. And that’s true, mathematically. After the COVID pandemic smashed the global economy in early 2020, global central bankers unleashed massive stimulus in late 2020 and all of 2021. That (and vaccines) stabilized the economy and markets. [...]

November 30th, 2023|

What’s Up? Not Much.

Monthly Outlook: November 2023 Global stock markets had a decent run from March to July. But they’ve been zigzagging lower over the past three months. We know many of you have noticed because you’ve been calling in for reassurance. We all know that markets bounce around daily, but we focus on medium- to long-term trend changes. That is, we’re looking for the day when any of our market ETFs cross over their price trendline. And we can report, we are seeing crossovers happening right now. As a reminder, price trendlines are a simple calculation, based on moving average prices. They’re numerical like a thermometer reading. On our charts, we can see when any of our market index ETFs cross above or below their price trendline. That’s our trigger to either buy or sell, and we’ve been selling. So, what’s up? US Growth Stocks, Commodities, and Short-Term Bonds. That’s about it. [...]

October 31st, 2023|

Mid-October Update: Back to Protection Mode

Monthly Outlook UPDATE: October 19, 2023 We talk about “trends” all the time and how we follow the trends to provide the growth that our investors want, and the protection that they need. Just today, the typical growth fund (which is a good proxy for what most investors own) switched from up to down, causing us to transition from growth mode to protection mode. For that reason, today is a good day to demonstrate how we invest with the trend. Like most money managers, we build globally diversified portfolios comprised of many markets: Bonds, US Stocks, and INTL Stocks. In our case, we use one index ETF for each market. Other managers may use mutual funds or individual stocks and bonds. The vehicle isn’t as important as the method or strategy used to know 1) how much to invest in each market and 2) when to buy and sell. That’s [...]

October 31st, 2023|
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