by Robert Holman | The Defensive Advisor | www.defensiveadvisor.com
INSIDE: Current market rating, economy, earnings, and a free offer.
TO MY CLIENTS, THANK YOU FOR YOUR TRUST. We’ve had great success since we started this RIA in mid-2018, up more than 94% in our moderate risk portfolios for the 39-month period ended September 2021, after all expenses are deducted.
MARKET RATING … Staying at 7 (where 0 - 4 is bearish, 5 is neutral, 6 - 10 is bullish). Although I’ve been more cautious about the near-term with risks increasing - I still remain optimistic longer-term.
We need to make a difficult adjustment … to anticipating lower rates of return in the period ahead. (P.S. This is a mental discipline that helps us not make mistakes, no matter the outcome. It’s not about whether milder returns happen or not, it’s about resetting our expectations so as not to go about seeking outsized gains like we’ve experienced recently – that type of “elephant hunting” causes losses).
The market has tried to move up the last two mornings but retreated after a brief rally. Worries about future inflation persist. The Fed NEEDS TO GET ON WITH IT and stop injecting money into the system. The risk is that if they don’t act soon, they will have to make BIG adjustments rather than gradual ones. Such big adjustments would likely be very detrimental to the markets.
The overall market is/has been down between 3% - 5%, depending on measurement date. Certain sectors like Tech have been/are down even more. Did you miss a sell opportunity in your non-taxable accounts? Just click here and I’ll send you the adjustments we’ve made to our moderate risk portfolios in the last 30 days.
ECONOMY … Responding to lower-than-anticipated jobs growth, GNP growth forecasts are being cut back by about ½ of 1% for the 4th quarter. Slower growth than originally expected ahead. That usually means stock prices are a little ahead of themselves. Just a bit. That’s the current environment.
EARNINGS … IF 3rd Qtr. earnings and/or forecasts for the 4th quarter are worse than expected, we will probably head down for a while. IF not, we may have passed-by most of the current worries (except persistent inflation). We’re invested mostly in the 2-3 sectors that we feel should benefit in the 2-3 quarters ahead. I’m being cautious and conservative with our portfolio holdings.
PORTFOLIO … Just click here, and I’ll be happy to send you a complimentary portfolio evaluation – explaining how the portfolio is likely to perform in the upcoming economic environment – pointing out any flaws we find in your portfolio and giving you our ideas for improvement – all at no cost to you.
ADDITIONAL THOUGHTS … “You know the nearer your destination, the more you're slip-slidin' away.” (Paul Simon). Yes, the economy keeps getting closer to recovery, only to find that the stock market is fading away. “And that’s the way it is, Tuesday October 12, 2021” (Walter Cronkite). If you haven’t taken defensive action, you may be disappointed (Robert Holman).
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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.