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. [...]

Monthly Outlook: April 2018  The first quarter of 2018 was sure volatile but, in the end, there was very little change to the broad market indexes.  By a narrowing margin, the trends remain up, which means we remain invested.  Just like Colorado springtime weather, we’ve seen a lot of wind (volatility), but so far, no storm (new down-trends).  With each burst of nerve-wracking market volatility, it’s natural to feel unsettled and tempted toward rash action.  But the key to investing success is to stay disciplined with a steady, calm, and proven strategy that focuses on long-term trends for guidance.  Our iFolios strategy is just such a strategy and will keep us invested appropriately. U.S. stocks (S&P500) lost just -1.0% in the 1st quarter of 2018, but it took the long way to get there!  The S&P500 first rose 7.4%, dropped 10.1%, rallied 8.2% again, and then sagged 5.2%.  The key [...]

Monthly Outlook: March 2018 In case you didn’t notice, February was a bit of a wild ride for stocks.  The S&P500 peaked on January 26th, dropped 11% by February 9th, then rebounded 8% by February 26th.  That’s a very unusual and large amount of volatility for one month!  We’ll talk more about volatility and risk later in this Outlook.  First, let’s review market returns for the month and year to date. U.S. stocks (S&P500) lost -3.7% in February but are still up +1.3% YTD.  The strongest sectors continue to be Technology, Financials, and Consumer Discretionary (mostly Amazon!).  International stocks (FTSE All-world ex-USA) also had a yo-yo February and fell -5.3% for the month, but are up slightly, +0.1%, for the YTD.  Outside the U.S., it’s the Emerging Markets that show the most strength.  Lastly, let’s look at bonds.  Bonds (Barclays Aggregate Bond Index), are down -2.2% YTD and that includes [...]