Message from Jon
These past couple of weeks have impressed us all with record highs in the markets and record noise in the headlines. Most recently, the headlines are divided between terrorist attacks abroad and geopolitical pressures with North Korea. It’s enough to make one believe that investing in the markets anywhere would be a risky proposition at best.
With all these headlines and negative news cycles, the markets keep on pushing forward. We have seen our foreign investments continue to grow giving affirmations that our data and information nearly 13 weeks ago was correct. The most recent data has us staying the course from an investment standpoint even though the heat is still on the rise and so is the danger long-term to principal.
All of our sources were demonstrating a potential correction heading into what historically has been the weakest two months of the year (September & October). But as of yet, there are no signs that we should change course or attempt to get out of the way. As a matter of fact, last week our most recent data indicated that a near term correction was not due to manifest at all!
I will leave you with the facts so far of just a few of our indicators:
Shiller's S&P 500 P/E Level: 30.68
- Historic Mean P/E Level: 16.78
- *From current to historic: 45.31% decline
Van Harp Market Condition: Bull Quiet
- *From March's Strong Bull Condition declined to Bull Quiet (just above neutral)
Lowryondemand: Selling Pressure index vs Buying Power index
- Selling pressure dropped from Oct of 2016 at 262 to 164 currently
- Buying Pressure has marginally increased from 112ish in Oct to 149 currently
- *Sellers have declined significantly but the buying has not continued in an overwhelmingly significant manner.
Dorsey/Wright Relative Strength:
- Dom Eq: 238
- Commod: 224
- Fixed Income: 218
- Cash: 152
- Int'l Eq: 144
- Currency: 104
All of these data points and more simply dictate that we remain invested and focused on growing portfolios. The evidence of a market correction we were expecting in Sept based upon historic and then current data has evaporated...for now.
Our positions overseas have all done really well thus far along with our Hurricane Harvey Portfolio. Time will tell if they continue but for now, all is well and moving in the right direction.
Till we speak again, enjoy your football season!
sources: lowryondemand, multpl.com, vantharp, dorsey/wright, yahoofinance
|Understanding Record Highs|
|WEEKLY UPDATE - SEPTEMBER 18, 2017|
Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5- year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on Morningstar.com and the index returns published elsewhere. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.