Monthly Outlook: October 2024 Stocks and Bonds continued to trend higher in September and have proven to be more resilient than many naysayers predicted. Stocks dropped 9% in August but came right back. Then stocks dropped 4% in September and, again, came right back. Nothing seems to kill this bull market party, at least not yet. This kind of market behavior (slip, and a save!) tends to make investors falsely confident, willing to hang on, and even buy more. Stock market bubbles always feel good, almost by definition, and we’ve been developing a bubble for the past year or two. That’s how we get to 100-year peak valuations like we have today. Similarly, parties (I’m told) are always raging and the most fun late into the night. But it rarely ends well for those who stay too long. Might this stock market party be raging well past midnight already? The [...]

Monthly Outlook: September 2024 Maybe you missed it, but stocks gave us a big head fake in early August, with the S&P500 dipping 9% before bouncing back 9% for a wild round trip over six weeks. This volatility has some investors wondering if this was a precursor of more volatility to come or was just one of those random market moves that proves how risky investing can be. Time will tell. As trend followers, the volatility did cause us to briefly move to protection mode by selling a few holdings. But within a week or two, the uptrends resumed, and we were able to buy back and get back to full-on growth mode. We know it’s a little frustrating to get whipsawed like this but it’s the best way we know to stay disciplined and avoid “the big loss.” Our portfolios are still up nicely over the past twelve months [...]

Monthly Outlook: August 2024 Global stock and bond markets continued to trend higher through July, although the Big Tech stocks waffled a bit this month. YTD through July, the US stock market is up 15%, the international stock market is up 8%, and US Bonds are up 2%. Importantly, nearly every market remains above its price trendline, which is our signal to stay invested for growth. As we look forward, we know we’re in the “100 Days to Go” mode with the elections coming on November 5th. Investors are also on “Fed Watch” as there are multiple hints that the Federal Reserve is getting ready to cut the Fed Funds interest rate at their September 18th meeting. And, to pleasantly distract us through it all, we had the Tour de France in July and now the Olympics in August. It’s a lot to take in and people have a lot [...]

Monthly Outlook: July 2024 We’re halfway through 2024 already and for investors, at least, it’s been a pretty good year. US stocks (Russell 3000) are up 14.1%, and international stocks (MSCI All-World ex-US) are up 5.7%. Bonds are flat, YTD, but are coming back up after a small dip in April. Since all markets are in uptrends (using our trend following signals), we’ve been fully invested all year and have captured the gains that the markets have given us. Our iFolios 100 (all stock) composite is up +9.5%, YTD, and our iFolios 75 (75/25 blend) composite, is up +6.5%, YTD, for example. Our iFolios Long/Short composite is up +11.0%, YTD, leading the pack of our models, per usual. But as we discuss often, averages don’t tell the whole story about markets and this year is especially noteworthy. In 2024, size matters. Mega-cap stocks, especially mega-cap US tech stocks, are vastly [...]

Monthly Outlook: June 2024 School’s out for summer! Last week kids all over the country celebrated graduation, move-ups, and the start of summer. The excitement is palpable as the opportunities for summer fun, from camps to travel to maybe even a summer job, lie before them. Parents surely have mixed feelings of excitement for more family time but more logistical challenges as they balance work and family life. For three months, June, July, and August, we as a country just agree that summer is a time to relax a little, enjoy the bounty that surrounds us, and rejuvenate ourselves even at the cost of a little slower work pace. As responsible adults and investors, this summer is a particularly opportune time to take off, rise to a 30,000-foot view, and consider the bigger picture. Our managed iFolios are up anywhere from 12% to 20% for the past 12 months, depending [...]

Monthly Outlook: May 2024 Markets were a little soft in April, but the overall trend remains up, up, up! It’s been a good run since the recent lows in October 2023 and we’ve been “all in” to capture the growth that markets are giving us. Our strategy is to ride the uptrends for as long as they last. We never use “stop profit” orders, only “stop loss” orders. We’re watching all markets closely and will stay fully invested in each one as long as it is moving higher. We can use this growth mode and quiet period to share some thoughts on an important topic. Today, we’d like to discuss risk tolerance, what it means, what it doesn’t mean, and how to make your portfolios truly reflect your own risk tolerance. If it’s smart to shop for umbrellas on sunny days, maybe it’s not a bad idea to contemplate risk [...]