A Bear Market is Imminent…
Some folks are spouting. We’ve received a few calls asking us about the preponderance of opinions calling for a recession and bear equity markets. Pundits are at it: calling for gloom and doom; publications are picking up on the predictions, and the fear factor may be going up, soon.
We’ve often stated on these missives that although a downdraft period may be in the offing, at any time, we never predict we, however, do act at times to protect values and at times to put more funds at risk as opportunities present themselves.
So how do the pundits do? Are their predictions worth reading?
I came upon the research completed by CXO Advisory Group: They collected 6.582 forecasts going all the way back to 1998 comprising 68 market experts. The report does not represent itself as the end-all of completeness or definitive accuracy they claim errors are present and have provided a process whereby the “pundits” can respond to their accuracy and rank. This alone is worth the read, see the link below under listed sources.
The accuracy of the forecasters is 47.4% – nice crystal ball, huh? Some pundits, eight to be precise, exceeded 60% accuracy, three reached levels between 65%-68%. As a comparison, stocks as measured by the S&P 500 index increase on average approximately 73% of the time.
The graph tries to show the timing of the comments and predictions within the perspective of the equity market itself – consider this graph the entertainment portion of this missive.
In the context of an economic boom, record sales and earnings, relatively low inflation and interest rates and the resolution of worldwide trade agreements, we remain bullish.
We look at investments as tools serving our clients. The purpose of which is to help our clients achieve their desired financial outcomes. Take a look at how we do things
Currently, our portfolios overweighted domestic equities.
Carlos Dominguez – Portfolio Manager, RJFS
Chart courtesy of John Boorman Broadsword Capital and TradeNavigator
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.
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The preceding information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Carlos Dominguez and not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.