Clint Sorenson, CFA, CMT
WealthShield
The Good...
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Economic growth remains in a positive trend.
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Global stock markets are the strongest asset classes we track.
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Inflation is muted and defensive asset classes continue to weaken.
The Bad...
- The growth in the ECRI weekly leading index peaked in 2017 and has since declined.
The Ugly...
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Transports and small capitalization stocks are weak relative to the broad equity market. The market has bad breadth! Market internals areweakening even as the broad market indices reach new highs.
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Credit markets suggest that market volatility should increase from here as high-yield spreads have recently crossed above the 200 day moving average.
What Should We Do?...
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Consider moving a portion of portfolio assets to a defensive posture (the worst case is that you buy back in at higher levels).
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Look at asset classes that are typically negatively correlated with stocks during down markets (i.e. Managed Futures).
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Do not buy and hold. This may be one of the worst periods ever to buy and hold the overall US stock market.
WealthShield is a division of Emerald Investment Partners, an SEC Registered Investment Advisor. Advisory services are only offered to clients or prospective clients where WealthShield and it’s representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by WealthShield unless a client service agreement is in place. Before investing, consider your investment objectives and WealthShield’s charges and expenses.
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