Market Analysis

Marin Group
Market Commentary

May 2022

 

The market correction we have been writing about is still with us and, we think, about to show its ugly teeth.  This is what happens at the end of climactic declines, and we believe we are near that end.  While the events surrounding it and the actual form the correction takes in terms of a price chart are always different, the way investors react are typically the same.  Since Gary and Dianne have been in the business, they have seen climactic lows in 1998, 2001, 2002, 2009, 2010, 2015 and 2020.  The thing these lows all had in common was that they evoked a high amount of fear.  This fear is the element that swings the pendulum to the far side of pessimism and creates an opportunity for those who keep their wits about them and act in a methodical, unemotional fashion.  Ahead of time, it is impossible to be accurate in forecasting the final low price a correction will reach, but the evidence suggests that the level on the Dow could be between 28,500-30,000 and the level on the S&P 500 could be 3,600-3,850.  There is usually some external event that causes market panic, which is not hard to believe given the current state of the world, and this usually causes people to question whether investing is such a good idea.  Again, this is what happens at climactic lows and should not be acted upon (a.k.a. liquidating all holdings).

To reiterate, our long term forecast for the stock market is that we believe we are still in the early stages of the biggest bull market of our lifetime and the next phase of it will be the most profitable.  This next stage will be the “ah-ha” moment for investors who got out of the market in 2020 and never got back in.  This will push prices higher at an accelerated rate and the chase for trading profits will be on.  Volatility will increase but so will returns.  We will try and make this ride as smooth as possible while helping you reach whatever goals you have shared with us that you want to achieve.

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.