Weekly Market Outlook
By Keith Schneider and Donn Goodman
We hope that you and your families had a safe and enjoyable Independence Day celebration.
Fireworks In the Current Markets
As all our regular readers and subscribers know well, our position has been that the stock AND bond markets have stunk since the beginning of the year.
The tug of war as to whether or not we are already in a recession is part of the daily chatter by the media, Wall Street analysts, and every economic commentator.
However, “in or not yet in” a recession doesn’t really matter to investors who have experienced the worst market since 1970.
We’re with you if you’re feeling that way.
Just how bad?
The unprecedented decline in both the stock and bond markets has wiped $15 trillion in wealth out of the US markets in 2022.
We humbly suspect that every investor has, in some way, felt the effects of this decline.
Long-term vital retirement plans, corporate balance sheets, and numerous industries (banking, brokerage, insurance, technology, etc.) are feeling the effects of falling asset prices and higher interest rates.
In June alone, the S&P 500, the Dow, the NASDAQ 100, and the Small-Cap indices were all down over 8% for the month. It wasn’t pretty.
Fortunately, it’s halftime, and this can create an opportunity for change.
Like in many sports, we’d be crazy to assume at halftime in the Super Bowl, in the 7th inning of a World Series game, at the final turn of the Kentucky Derby, at the turn of the Masters, etc, the leader would be the winner of the game.
It’s time to approach the second half of the year with a rational and confident perspective that acknowledges the ugly first half of the game (year), and use it to prepare for the remainder of the year to win the game.
First, let’s take a few moments to reflect on the numerous (and often) times we pointed out to “take cover, raise cash, move to commodities and value stocks, shorten fixed income duration and avoid listening to the media, other pundits and especially (and most of all) any financial advisor suggesting you stay the course.
As a brief history lesson, let us go back to November 21, 2021 right before Thanksgiving when we wrote, “Something Stinks“. We said “With inflation rising at an accelerated rate and disruptions in the supply chain creating shortages and enhanced demand, everything including milk (baby formula) cars, food products, paint, lumbar, gasoline and especially Turkey are rising at double digit rates, which will eventually wreak havoc in our society. These rising costs are going to (if not already) impose a substantial tax on every American just through their everyday purchase”.
Has it gotten better?
Absolutely not. If anything, the past 2 months have certainly exacerbated our thesis from last Thanksgiving.
We will also likely continue to see wild market swings, heavy and frequent sector rotation, pressure on interest rates, and more scarcity and shortages in everything from food and power to gasoline.
We Take This Seriously
We value you, our readers, subscribers, and friends. We are most sincere when we say that we operate a company that strives to make your financial life better. We also want you to feel more secure about your investments, have peace of mind, and have a workable plan for the future. Stating the truth, being open and transparent, and making your life better is our core mission, and we take it very seriously.
For 2022 that means minimizing the losses and helping to provide better ideas and strategies than you’d find in the top 10% of all newsletters and money managers in the US. Do you realize that at the end of June, we have 5 investment strategies that are positive for the year thus far? I think you would agree that is HUGE!
“I love quotes… but in the end, knowledge has to be converted to action or it’s worthless.” — Tony Robbins
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