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 [...]

Monthly Outlook: June 2018  U.S. stocks continue to mark time in May, stuck in a sideways, range-bound channel.  The S&P500 has been stuck at 2,700, give or take 100 points, for the past six months.  If the economy is so good, as evidenced by rising corporate earnings and full employment, then why can’t the stock market continue to advance?  Could it be that the barrage of tweets (from many people) and the constant cross-talk of tariffs and trade wars is just too confusing?  Perhaps CEOs and investors, alike, are unable to commit new capital, frozen with indecision.  More on this later, but let’s first review the markets. U.S. stocks (S&P500) had a decent gain in May, adding 2.4%.  But this market remains stuck at about 2,700 these past six months and is presently at 2,705.  For the past 100 trading days (which is close to YTD), the S&P500 has closed [...]

Monthly Outlook: May 2018  Global stocks have now stalled for the past five months as investors digest conflicting inputs.  On the positive side, corporate earnings continue to move higher, but so do interest rates (a negative).  Consumer confidence and employment are high, but so are valuations.  And although the S&P500 is exactly where it was five months ago, there’s been a lot of volatility and conflict along the way.  History shows us that stocks don’t move sideways for long.  We expect resolution soon and for a sustainable trend to develop.  The question is “which direction?”  Will the 9-year uptrend continue or are we about to enter a correction?  It’s also possible that the answer is “both.”  Some asset classes could trend higher while others sink.  That’s why we’re always vigilant and managing the mix in our iFolios.  We’ll discuss that in more detail later, but let’s review the markets first. [...]