Blog2019-09-13T10:23:28-06:00

Everything is Awesome?

Monthly Outlook: May 2019   You hear it everywhere – “Everything is Awesome!” GDP is up over 3%, earnings are up, employment is up. Stocks, bonds, gold, dollar, home prices – all up! Awesome! It’s a chicken in every pot! What could go wrong?  We’ll get to that. But first, let’s review April. U.S. stocks continued their 2019 rally with the Russell 3000 gaining another 3.9%. The strongest sectors are Technology and Utilities, an odd combination. Weakness is seen in Energy, Financials, and Healthcare. International stocks gained 2.7% with Europe and Emerging Markets doing better than Asia. Bonds marked time in April with flat results, down 0.1% for the month. Blending the markets for common allocations, the iFolios 75 benchmark was up 2.3% and the iFolios 85 benchmark was up 2.7%. We matched or slightly beat the benchmarks in May. So yeah, everything does seem awesome! We should also point out here [...]

By |May 3rd, 2019|News, Outlook|

Invest like a Boy Scout – Be Prepared

Monthly Outlook: April 2019  March was another decent month as U.S. stocks added 1.8% and international stocks gained about 1.0%. Bonds were the unlikely star of the month, adding 1.9%, after the U.S. Fed signaled that they were likely done raising rates after their meeting on March 20th. Putting it together, the balanced iFolios 75 benchmark rose 1.2% and we beat that slightly.     The focus should really be on longer term trends, not just month-to-date.  From March 2016 to October 2018, stock markets rose steadily.  The S&P500 rose from 2,025 to 2,750 over that 3½-year period, a nice gain of 35%.  Then the yo-yo started.  In mid-October 2018, the S&P500 dipped below 2,750, its 200-day m.a. trendline, for the first time in nearly four years.  That’s when we sold for protection.  Stocks dropped a stunning 15% for two months, crushing the Christmas spirit.  Then, as suddenly as they dropped, [...]

By |April 2nd, 2019|News, Outlook|

Yo-Yo Complete. Now What?

Monthly Outlook: March 2019  Last month we discussed the stock market “yo-yo,” a dramatic 4-month dip & rebound of about 15%. In February, stocks extended the rebound a bit more with another 2% gain to complete the full yo-yo cycle. The S&P500 is now back to where it was four months ago, but after a wild ride. In fact, the S&P500 is where it was a year ago, about 2,800. The market has gone nowhere in a year! I kid you not, look it up. That’s more than a little frustrating to investors who expect to make money every year. Looking back at 90 years of stock market history, we know that only 7 years were flat (+/-2%). And never was a flat year followed by another flat year. So, we have to ask, “Now what?”  History also tells us that stocks have been up 73% of the years and [...]

By |March 5th, 2019|News, Outlook|

Stocks Yo-Yo: Trend Still Down

Monthly Outlook: February 2019 Wow, what a great month for stocks!  Markets yo-yoed in December and January.  You may remember 2018 ended on an unhappy note with stocks dropping sharply in December.  U.S. stocks (S&P500) dropped 8.8% in December.  But then they snapped back 7.9% in January!  The same yo-yo pattern occurred in international stocks with the EAFE Index dropping 5.3% in December and snapping back 6.6% in January.  The news will highlight the recent strength but really stock markets are only back to where they were two months ago at best.  As always, we use our long-term trend indicator (using the 200-day moving average) to determine the overall trend of each market.  And unfortunately, nearly every stock market remains in a down-trend for now.  Sorry to be the bearer of that news.  Of course, the bounce in January puts most stock markets closer to their declining trend line, but [...]

By |March 5th, 2019|News, Outlook|

2019 Forecast: Made for iFolios!

Monthly Outlook: January 2019  Happy New Year!  2018 was not a particularly good year for global stock markets so we’re happy to be moving forward.  International stocks started a new downtrend in May/June due to trade concerns and Brexit and then it rolled over to U.S. stock markets around mid-October.  The Grinch came to steal Christmas in December with the S&P500 falling 10% and international stocks losing 5%.  It was a weak ending to an already softening year.  The good news – that we’ll discuss below – is we’ve been selling stocks for the past six months and are avoiding the bulk of these losses.  First, let’s review 2018 market returns. U.S. stock markets lost 6.1% in 2018, but were flat right up to December 13th.  International stock markets fell 14.2% in 2018 and were more steadily down from start to finish.  Looking for slightly better news we turn to [...]

By |December 31st, 2018|News, Outlook|

We’re in the 25% Zone

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 [...]

By |December 3rd, 2018|News, Outlook|