Monthly Outlook: December 2018  Happy holidays!  There are just 20 more trading days in 2018 and most of those will be low-volume as we get closer to year-end and holiday season.  A lot could happen in this last month but it’s a pretty good bet that we’ll end up about where we are now.  So, the question is, “Where are we?”  Well, we’re in the 25% zone. Looking at S&P500 returns back to 1928 (90 years of data!), we can see that the market has been up 75% of the years and down 25% of the years.  The average has been +9.6%/year.  Another way to look at the market is compared to its 200-day moving average (m.a.), or what we call the trendline.  The S&P500 has been above it about 75% of the months and below it 25% of the months.  As we said in last month’s Outlook, October was [...]

Monthly Outlook: November 2018  October was a pivot month.  The three-and-a-half-year uptrend is over (for now) and markets have turned to a new downtrend.  As a result, we’ve moved portfolios from growth to protection.  This is the core of our iFolios strategy and most likely why you chose us to manage your money.  During an uptrend, one should “buy the dips.”  But in a downtrend, one should “sell the rallies.”  Don’t get fooled by the pundits and talking heads.  Many of them are guessing about the future which is a difficult task and most of them will be wrong.  Our iFolios strategy simply requires us to read the signs and allocate accordingly.  Today, we read “stop signs” in many markets and so we’re very underweighted global stocks.  We don’t know – and no one else does either – how long or how far this downtrend will go.  We could pontificate [...]

Monthly Outlook: October 2018 September felt like a busy month in the markets but when all was said and done, it was only a marginally positive month.  U.S. stocks gained a mere 0.19% with Energy and Healthcare sectors outperforming the broader market.  The tech-heavy NASDAQ actually lost a scant -0.28% in September.  International stocks were also lackluster, gaining just 0.44% for the month.  Europe is still bogged down with Brexit talks and trade tariffs are hurting Emerging Markets.  The big difference between U.S. and international stocks, and we can’t point this out enough, is that U.S. stocks continue to trend higher while international stocks are trending lower.  As a reminder, we define the trend as whether the index is above or below its 200-day moving average.  For this reason, we remain heavily invested in U.S. stocks for growth and under-weighted international stocks for protection from loss.  Lastly, bonds lost -0.55% [...]

Monthly Outlook: September 2018  Now that we’ve had our Labor Day holiday, we have to concede that summer is behind us.  On Wall Street that always signals a return to seriousness and focus.  Trade wars, corporate earnings, upcoming elections, global central bank actions, debt and valuations will all be studied for clues about year-end market movements.  But before we look ahead, let’s review the markets to see what’s working and what’s not. Global stocks are only up 3.6%, year-to-date (YTD) which is a little low for eight months.  But that doesn’t tell the whole story.  U.S. stocks are up 9.7%, YTD, while international stocks are down 3.4%, YTD.  Looking back at decades of history, we see that U.S. and international stocks are actually highly correlated, moving up and down together.  So, we have to wonder if U.S. stocks will join the international downtrend?  Or will international stocks rejoin the U.S. [...]

Monthly Outlook: August 2018 Summer doldrums are apparently good for markets as most markets floated a little higher in July. U.S. stocks gained a respectable 3.3% while international stocks gained a similar 2.9%. Bonds, on the other hand, were flat, -0.04% to be exact. Although a gain is a gain, we need to point out that U.S. and international stocks trends have diverged and that is a concern. That is, while U.S. stocks continue to trend higher, international stocks tipped to a downtrend last month as we discussed in our last Outlook. And even though both markets enjoyed a robust month, our outlook is based on the prevailing trend. We remain positive for U.S. stocks but have trimmed back our exposure to the down-trending international stocks. For the year to date, U.S. stocks are now up 6.5% while international stocks are down 1.1%. Bonds are down 1.8%, YTD. As a [...]

Monthly Outlook: July 2018  For most of this year, we’ve seen global stock markets moving sideways but trending higher.  That is, prices remained above their 200-day moving averages.  That changed in June.  Although the headline market – the S&P500 – remains up-trending for now, many markets just “tipped” to downtrends.  Of course, that means we’ve trimmed our positions in those markets and moved to protection mode.  For the first time in years, you’ll notice that we’re holding some cash and have become a bit more conservative in our allocation mix.  Now is not the time to just sit there with a buy & hold allocation and hope for the best.  Things have changed. Let’s review the broad markets before we delve into the specifics.  U.S. stocks (S&P500) managed a small gain of 0.5% in June and are up 2.5%, YTD. The S&P500 remains stuck at 2,700, give or take 100 [...]