Spooky equity market, just in time for Halloween…
We could say the same thing about our current political landscape, the world’s economies, our trade spats with China, the shrinking Chinese economy, the Italians and the EU, and, fill-in the blank __________…
On the landing page of our website, we explain how we handle uncertain investment markets:
“Unpredictability of Investment Performance
None of us knows what the future brings. We do not predict the future. We question and are leery of inflexible assumptions about the future. So, we strive to understand you and your family and as a result, develop your plan and investments for a wide range of market, economic, and life-event alternatives.
- We do not guess.
- We plan for the long-term and act in the short-term to help limit risk, to enhance your outcomes, to make the plan “real-time.”
- We employ behavioral counseling, risk management, and portfolio construction to balance short-term fears with longer-term goals.”
If you are our client, you know that John Lilly and I are portfolio managers: We select, buy and sell securities in accordance with each client’s investment objective. You would also be aware that beginning 20 days ago we began to limit our exposure to domestic equities. We had minimized our exposure to foreign equities in the early part of the year. Both of these actions took place with an eye to limiting short-term risk.
We did not guess: we employ cash to equity relative strength comparisons and loss limits*, and when these thresholds exceed our parameters, we increase cash positions. Currently, do not expect this equity market correction to get much worse. In our opinion, this turbulence in prices is likely to continue as the pull and tug between buyers and sellers determine the final direction of equity prices. We believe there’s a preponderance of positive evidence; a booming economy, higher wages, record corporate sales, revenues, margins, and earnings suggesting a bright future for equity prices and increased dividends: We’ll know in time.
For now, remember: If you own a portfolio of the world’s best companies, a bunch of people, every day, get up, wash up, dress up and go to work to provide value to their customers and thereby, benefit you, the shareholder.
Leave the spooky stuff for Halloween
Go to our home page, scroll down, take a look.
Currently, our portfolios exhibit proportionately higher cash balances than normal.
Carlos Dominguez – Portfolio Manager, RJFS
*We subscribe to Nasdaq Dorsey Wright which provides us with the analytics by which we can measure and track various groups of D&J selected indicators: “Dorsey Wright’s expertise is technical analysis, focusing on the steadfast relationship between supply and demand in the markets. Our Research Platform helps clients see through the day-to-day clutter of market movements and provides a clear understanding of where market strength lies at all times.” Quote attributed to Tom Dorsey – Founder http://bit.ly/2iMqsgK Raymond James is not affiliated with Nasdaq Dorsey Wright or Tom Dorsey.
Links are being provided for information purposes only. Raymond James is not affiliated with and does not endorse,
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content of any website or the collection or use of information regarding any website’s users and/or members.
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. Investing always involves risk. There is no assurance that any investment strategy will be successful.