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12:00 TUESDAY – Stock Market Report #116 – 5/25/21

by Robert Holman | The Defensive Advisor | www.defensiveadvisor.com


INSIDE: Current market rating, the economy, education, and a free offer.


MARKET RATING My rating opinion is now 6.5 (0 - 4 is bearish, 5 is neutral, 6 - 10 is bullish) due to expected lower valuations (from interest rate or inflation increases). The market is still overbought, overvalued and overdue for a pull-back of some type, so stay tuned


ECONOMY Primary worries remain inflation and interest rates. Increases in any of the three are highly likely to reduce stock prices. However, for now, the market seems to think these are both under control.


My opinion … we are in a 2-year expansion to reach a complete recovery to pre-Covid conditions -- that would make 2023 a year of “normal growth”. Not all sectors will benefit equally, so become a HWM client and I will help you to take advantage of the expected, upcoming conditions.


EDUCATION: It is possible to determine when to buy and when to sell … Warren Buffet has said he knows quite a few people who can do it. The problem then is finding someone in your network of friends who can do it.


The following educational piece is for finance “gurus”:

The CAPM, like Markowitz’ Portfolio Model on which it is built, is nevertheless a theoretical tour de force. We continue to teach the CAPM as an introduction to the fundamental concepts of portfolio theory and asset pricing, to be built on (by your own research) by more complicated models like Merton’s ICAPM… But in the late 1970s, research begins to uncover variables like size, various price ratios, and momentum that add to the explanation of average returns provided by beta. The problems are serious enough to invalidate most applications of the CAPMBut we also warn students that despite its seductive simplicity, the CAPM’s empirical problems probably invalidate its use in applications. SOURCE: The Capital Asset Pricing Model: Theory and Evidence by Eugene F. Fama and Kenneth R. French, 2004. [Note: the words “(by your own research)” are injected by myself, and italics have been added by me for emphasis.]

THANK YOU TO MY EXISTING CLIENTS FOR YOUR TRUST. We’ve had great success since we started this RIA in mid-2018, up more than 60% in our moderate risk portfolios after all income and expenses.


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I will give you a complimentary portfolio evaluation. I will give you an analysis of any flaws found and I will give you some good ideas for improvement. Just contact me at my phone number 972-702-6032, email address, or by sending your contact information via the website link below.


Published every Tuesday at 12:00 noon. For more information on my investment and planning services, or to sign-up for my weekly e-Newsletters, visit my website: http://www.defensiveadvisor.com/contact or http://www.defensiveadvisor.com/blog

Opinions voiced in this post are for general information only and are not intended to provide specific advice or recommendations for any individual, without complete knowledge of that individual’s total financial profile. No strategy assures success or protects against loss. Past performance does not guarantee future results.

#StockMarketInvestmentLetter #InvestmentManager #IndependentFinancialAdvisor #12:00 Tuesday