Market Analysis

Marin Group
Market Commentary

August 2023

Evidence continues to mount around support of our ongoing assertion that we are still in the beginning stages of a powerful long term bull market.  One of the things to take note of is, despite the adage “Don’t Fight the Fed,” the market continues to rally regardless of the rise in interest rates.  This, to us, indicates an underlying strength that is indicative of a long-lasting bull market.  We believe when the tightening cycle is over, prices will begin to rise faster and entice more people on the sidelines to jump into the market.

To quantify how far we believe this bull market could carry us in terms of price, we can look at the example of the Dow Jones Industrial Average from 1974-2000.  We do this because we believe the percentage return and the length in terms of years of our present bull market could be very similar.  In 1974 the Dow bottomed at 577.60 on December 6 and never returned to that level.  There were corrections along the way, but it is generally understood that the bull market that started on that date ended on January 14, 2000, at 11,750.  The annual percentage return for that market was approximately 12% over a 26-year period.  Our present bull market began on March 6, 2009, when the Dow hit 6,469 so a similar interest rate and time period would value the Dow at 123,170 in 2035.  The number may seem unbelievable, but it would represent a pretty typical bull market over the past 120 years.

The first half of a bull market is usually where the easy money is made if one has the ability to act objectively and not listen to the crisis of the day and pull money out.  Volatility rises in the second half, and it becomes a challenge to act prudently and not greedily. In the meantime, we will try and keep your money where it is best rewarded and move you toward your financial goals.

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.