Monthly Outlook: October 2023 We know that stocks have been in a correction the past two months, and it feels a little painful. The S&P500 is down 6.3%, and the NASDAQ is down 6.6%. International stocks are down 7.5%. Bonds have lost 3.1%, too, so they aren’t helping, either. The question being asked is whether this is a normal 5%-10% correction or the beginning of something worrisome? There is a lot of handwringing about inflation and interest rates, recession or no recession, rising unemployment, stalling corporate earnings, dysfunctional government and shutdowns, upcoming elections, and so on. If we could just know all the answers today! Of course, no one can but there may be something better that we do know. At least when it comes to investing, we can measure with 100% certainty the price trendline for every market. We can observe, on a daily basis, whether a market is [...]

Monthly Outlook: September 2023 Nearly every market remains in an uptrend this Labor Day. US Growth and Value, US Small, INTL, Emerging, Bonds, Commodities – they’re all trending higher. Everything is awesome, right? It feels like all news is good news, at least to markets. (We’ll discuss this later.) Most markets had a pullback in early August before recovering last week. Pullbacks of 5% are routine during uptrends and, so far, that’s all we had in August. Since markets are trending higher, we remain “all in” and positioned for growth. Can All News Be Good News?   While we’re cautiously optimistic about markets, it’s also prudent to be professionally skeptical. The evidence that supports strong markets is more mixed than the price trends suggest. This summer, I’m sure we all noticed that airplanes are full, restaurants are busy, and people are shopping. The economy sure appears to be humming along. [...]

Monthly Outlook: August 2023 Markets continue to trend higher, and portfolios are growing. For all the nervous talk about interest rates, recession, inflation, and other risks, the markets just don’t seem to listen or care. The Magnificent Seven big technology companies certainly sparked the initial excitement earlier this year, but the optimism has spread to other markets and now almost every market and sector is moving higher. This summer, the trend is our friend and we’re fully invested to capture the available growth. It’s a good time to remember that the market is not the economy. And we invest in the market, which can, and often does, act in counterintuitive ways to the fundamentals and economic data. Yes, the Fed has raised interest rates from 0% to 5.25% over the past year and that should slow the economy. Yes, inflation is still too high at 4% to 5%, depending on [...]

Monthly Outlook: July 2023 Some of our readers will remember a great American Western movie from the 1960s called The Magnificent Seven. It had a great cast with Steve McQueen, Yul Brynner, Charles Bronson, and others as tough guys that were hired to save the town. Today, there’s a new Magnificent Seven in town and they’re here to save the stock market. Apple, Microsoft, Amazon, Nvidia, Google, Tesla, and Meta (Facebook). These seven stocks have rallied for the past six months as investors are in love with anything “AI” or involved with artificial intelligence. AI is the new “dot com” and investors will pay any price to be a part of it. Maybe we should change our investment strategy name from i-Folios to AI-Folios! 7 vs 493 The Magnificent Seven stocks have provided nearly all of the returns of the S&P500 this year. This contribution is due to two factors: [...]

Monthly Outlook: June 2023 The current news for investors centers around rising interest rates, raising the debt ceiling, bailing out failing banks, the possibility of a recession, narrow breadth where big gains from 10 Big Tech stocks are propping up the whole S&P500, and so much more! No wonder Consumer Sentiment readings are soft. We could go deep into the weeds on all of this, but this month I’d rather step back and focus on the bigger picture. I believe there are four steps to being a better investor that might add more value to you than the current news. The four steps are Goals, Markets, Strategy, and Evaluation. But please don’t stop reading here, continue to learn why. Goals, What Do You Really Want? I think all investors would be well served to deeply think about their goals and to clearly articulate to their advisors what they really want. [...]