by Robert Holman | The Defensive Advisor | www.defensiveadvisor.com
INSIDE: Current market rating, interest rates, the economy, stocks, and a free offer.
MARKET RATING … No change from 7.5 (where 0 - 4 is bearish, 5 is neutral, 6 - 10 is bullish). The market continues sideways with an upward bias (this distinguishes todays path - creeping along - with about 6 months ago when we had a much steeper trajectory.
Every day since 7/18-7/19 (down 1,025 points for the two-day period) that the market has gone up, except one, the market finished higher than it opened, and conversely every day the market trended lower, it opened higher during the day. In other words, opening prices have been a poor indicator of where the market finishes.
INTEREST RATES … After showing strong signs of increases just ahead, that was reversed by an unexpectedly low reading of 70.2 (81.6 was expected) on August consumer sentiment versus 81.2 the month before. Such a low reading brings expectations that the economy will be slowing down, and thus rates fell.
THE ECONOMY … The premise that Covid-delta variant was having little economic effect has been proven wrong also. Retail sales ex. autos were -0.4% for July. August could be worse.
STOCKS … I put some uninvested cash in some accounts to work believing interest rates were rising, the day before consumer sentiment was reported. So, it may take 6-8 weeks longer, when Covid-delta subsides, for that to work out. Picking stocks that will perform strongly in this environment remains challenging, yet good opportunities still exist. Selection and timing are all important.
TO MY EXISTING CLIENTS, THANK YOU FOR YOUR TRUST. We’ve had great success since we started this RIA in mid-2018, up more than 80% in our moderate risk portfolios for the 3-year period, after all expenses are deducted.
FREE OFFER for PROSPECTIVE CLIENTS – I control risk by adjusting our portfolio holdings - either selling down underperforming sectors or entirely deleting sectors - concurrent with increases in market risk, in order to preserve our capital. We invest in sectors opportunistically when market risk is lower.
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Opinions voiced in this post are for general information only and are not intended to provide specific advice to 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.