No easy answers

August 29, 2017

Early this morning my phone was buzzing with notifications from all the various news apps following the North Korean launch of a missile that crossed over Japan. While this is not unprecedented it does come at a time where the Trump administration is dealing with a seemingly endless list of problems. This morning while driving to the office I flipped between CNBC & Bloomberg and heard a bunch of "experts" discussing what the US needs to do to deal with North Korea. Yesterday driving home they were talking about the difficulties the president will face getting any sort of meaningful tax reform accomplished this year. Prior to that it was health care reform.

 

There is one common theme with all of these issues -- there are no easy answers. I've been amazed by the parade of clients, either in person or via the phone, all of which a few years ago wanted to take very little risk in their portfolios, declaring their confidence in the stock market. They all see little that can derail the upward trajectory of the S&P 500 and want a piece of it. My warning to them has been the same --- minus a very small group of people that were labeled "crazy" and nearly forced out of the money management business, very few people saw any sort of risk in the market in 2007 or 1999.  In nearly all bear markets the event that starts the selling seems minor at the time and as it evolved turned into something few had expected a few short months earlier.

 

I may be wrong and the market could continue its march higher the rest of the year and well into next year. However, my experience and study of market history tells me the market will not go straight up forever and we will hit a time where the market losses grow larger than most people can handle (even if they tell us today they can handle them.) When you combine a streak of large losing months or quarters with the negative headlines that will be prevalent during that time, our emotions take over and selling begins to accelerate.

 

With SEM you get the best of both worlds. We are still exposed to the market in our growth programs, albeit not as much as we were a few months back, but still over 60%. The difference is we are monitoring this exposure DAILY and MONTHLY for signs of weakness and if the models say to get out, we'll get out. No emotions, no guessing.

Please reload

Featured Posts

Investment Grade Junk

September 11, 2019

1/10
Please reload

Recent Posts

November 13, 2019

November 6, 2019

October 10, 2019

September 26, 2019

Please reload

Connect
  • LinkedIn Social Icon
  • Twitter Social Icon
  • Facebook Social Icon
  • RSS Social Icon

Related Posts

Please reload

This site is for INFORMATIONAL PURPOSES ONLY.  The comments and posts published in the SEM Trader's Blog ARE NOT investment recommendations. They can NEVER be considered as trading calls or advices. If you decide to use the information offered here for your real trading it is at your own risk.  CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute

Investing in the stock or bond markets involves risk and may not be suitable for all investors. Before making any investment decisions you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists you could sustain a loss of some or all of your initial investment and therefore you should not invest money you cannot afford to lose. You should be aware of all the risks associated with your investments and seek advice from an independent financial advisor if you have any doubts. All investments involve risk including those managed by SEM Wealth Management.

Opinions expressed at www.stratequity.com, www.semwealth.com and semtradersblog.com or the previous Trader's Blog site are those of the individual authors and do not necessarily represent the opinion of SEM Wealth Management or its management. Any opinions, news, research, analysis, prices or other information contained on this website, by SEM, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. SEM will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

 

The use of this website constitutes acceptance of our user agreement. Past performance is NOT indicative of future results.

***Anywhere performance of SEM's Investment Models is used, please refer to our Performance Snapshot  which contains details of the performance calculations for each of our investment models.***

 

There is no representation made as to the future results of SEM’s programs or if they will be profitable.

For additional information on the author and SEM Wealth Management, please see our DISCLOSURE DOCUMENT (ADV Part 2).