Market conditions remain “straight down the middle” as the song goes, meaning that things are happening the way they should given where we believe we are in the overall bull market trend. It is much like the movement of the Saturn V rocket on its way to the launch pad. It was so large that it did not appear to be moving. But it was moving, just at a slow, very steady pace. Our contention is that the bull market we are currently in is so massive in terms of longevity, that it can, at times, seem like watching grass grow. For those individuals who are heavily invested (our clients), this is the time of “easy money.” For those who exited the market out of fear (not our clients), it will be a while before they are enticed to commit their funds fully to market risk. As a side note, it can be exceedingly challenging to get back into a market after a big drop (think March 2020) and a lot of folks are still sitting on the sidelines (again, not our clients).
Portfolio management at this stage is to keep the appropriate amount of money in the market, adjust for change in sector leadership, and hold until signs of full valuation. As we discussed in this commentary a few years ago, interest rates have broken their downtrend started in 1980. This does not mean they are going to rise immediately because breaking a 40-year trend takes a long time to get things moving in the opposite direction. For now, rates are likely to vacillate in both directions which is kind of ideal for the stock market.
Gary and Dianne
This report is provided as a general market overview and should not be considered investment or tax advice or predictive of any future market performance.
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