by Robert Holman | The Defensive Advisor | www.defensiveadvisor.com
EQUITY MARKET RATING … 4.5 (0-4 bearish, 5 neutral, 6-10 bullish) … It’s worth repeating again.
The market is rallying, but it may be short lived. Why? Severe risks. War, additional boycotts of Russian oil, a likely 50 bp increase in the Fed’s key lending rate, short-term rates possibly exceeding long-term rates, all resulting either in slower growth this fall or a recession in a year to 18 months. The market could increase while these issues get resolved but getting in and out in such a hurry is tricky and challenging; a miss can be very costly.
A rally in tech stocks yesterday is being mostly undone by a sell-off in tech stocks today. The day is not yet over, so we will have to see how things end up. Mike Wilson of Morgan Stanley says the “bear market rally” is over, Jim Cramer of TV fame says the market has bottomed. Who should you trust?
The Energy sector continues to make new highs. Financials are near year lows, even though interest rates are increasing. Healthcare is moving toward new highs. Market history shows that the third year of a bull market produces on average a 5% return (credit: Josh Brown). The market rallies when risks slip from focus, sells off when they come back in focus, resulting in dramatic price swings in both directions.
EQUITY MARKETS and the ECONOMY … Inflation may start to look like it’s slowing - as future months are compared to past months (with those prior months containing price increases). But, we think the rate of increase will still be painful. Also, port crowding continues to diminish. But the upward trend in prices will continue even if the percentages are a bit smaller. Consumers will feel an increasing impact of higher prices.
PORTFOLIOS … After reading this material, if you are unsure what to do with your portfolio, call me to discuss your circumstances and I’ll explain what ought to be done to help your situation. Just click here, and I’ll be happy to give you a complimentary portfolio evaluation along with a recommendation for two stocks to put into your portfolio.
I’ll also explain what’s good about your portfolio, how it’s likely to perform in upcoming months, and giving you a couple of ideas for improvement, all at no cost to you.
Alternatively, you may contact me by calling 972-702-6032, and I’ll give you a way to securely email your portfolio holdings to me and I will input the data for the evaluation.
TO MY CLIENTS … THANK YOU FOR YOUR TRUST. We’ve had great success since we started this RIA in mid-2018, for are doing better than the market return over the same time.
Excelsior Divitiae. Proverbs 21:5, 22:3, 27:12 and 3:56, Joshua 1:9, Ecclesiastes 8:7, 1Chronicles 12:32 and 29:11-13, and James 4:13-16.
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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.