Market Analysis

The correction of the first quarter appears to be over and the market‘s trajectory is steepening into the “sweet spot” of every bull market.  Despite all the headlines, the market is literally “climbing the wall of worry” that is typical of any long-term advance.  The market action forces the reluctant investor, some of whom have been out since the pandemic decline, to start to throw money in so as not to miss out on any more gains.  Our belief is that we are a little over halfway through this long-term bull market that began in 2009, but we are about to enter a stage that is more volatile while also more lucrative.

Later stages of a bull market bring up the issue of buy and hold investing because of the long duration of the rally.  Hindsight is what creates the illusion that if you just hold a good stock forever, you never have to pay capital gains. The problem with this is stocks do not go up forever. A great example of this is when a fellow investment advisor told us back in 1999 that GE was a stock that would never suffer a meaningful decline and he would never sell it and pay the gains.  Well, as is usually the case, the market took care of his capital gains problem.  GE went from about $89 /share to $10/share over the following nine years and remained in a bear market for 22 years until they recently went through restructuring.  Our trading strategy is based on long-term considerations and our average holding period for individual stocks is dependent on market conditions but is usually between 2-4 years.  We do our best to minimize tax liability, but the market is the ultimate determiner of the holding period of stocks.

We sincerely thank all of you who have trusted us through the years, and the growth of accounts has truly been remarkable. 

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.

Any security mentioned in this report may not be suitable for all investors. No investment mentioned in this newsletter constitutes a recommendation to buy, sell or hold a particular investment. Such recommendations can only be made on an individual basis after an assessment of an individual investor’s risk tolerance and personal circumstances. Past performance of any investment mentioned is not a guarantee of future performance. Statements regarding the investment concerns and merits of any company and fair market value computations are strictly the opinion of Marin Group. Employees of Marin Group and Marin Group clients may have positions and effect transactions in the securities of the issuers mentioned herein.