by Robert Holman | The Defensive Advisor | www.defensiveadvisor.com
STOCK MARKET RATING … 3.0 (0-4 bearish, 5 neutral, 6-10 bullish). The weekly bull/bear battle continues.
EQUITY MARKETS and the ECONOMY … Many market commentators believe we have already seen the lows and highs for the year.
They see the equity markets bouncing around, swinging back and forth, rising toward old highs, and falling toward old lows, only to repeat that cycle before new highs or new lows are reached. This is primarily because the Fed will continue to raise interest rates as persistent inflation (above 2-3%) continues through year-end, and into 2023. The Fed will likely raise interest rates another 1-1.5% percentage points in coming months.
Therefore, we believe the best-case scenario is for brief bear market rallies within a downward secular market trend, as Fed tightening will cause the economy to recess. The Fed tightening has led to significant investor concern that future corporate earnings will be headed down and the lower earnings will almost surely bring the market down further.
“We are not out of the woods yet.” Bear markets typically end with very sharp decreases in the last 30 days. We have reduced our stock holdings, and continue to seek pockets of opportunity. Currently, all opportunities seem to be short-term in nature.
NOTE: I stopped writing this weekly letter for about 6 weeks. I needed to care of my wife after her rotator cuff surgery and I had to cut back somewhere. She is beginning to heal and to do more things for herself, consequently I am now free to resume my writing efforts.
PORTFOLIOS … After reading this report, 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.
If you would like a complimentary portfolio evaluation, just click here and we will explain what’s good about your portfolio, what you should consider changing, and how it’s likely to perform in upcoming months, all at no cost to you.
TO MY CLIENTS … THANK YOU FOR YOUR TRUST. We’ve had great success since we started this RIA in mid-2018 and are doing better than the market return since that time period.
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.