Risk/Reward Vol. 402
THIS IS NOT INVESMENT OR TAX ADVICE. IT IS A PERSONAL REFLECTION ON INVESTING. RELY ON NOTHING STATED HEREIN.
This will be a shortened edition. We have everyone (except Bill) in town this weekend for an early Christmas celebration.
Another week, another roller coaster ride. The Dow and the S&P made valiant efforts to break into the green, but just couldn't get there. They are not alone. According to Deutsche Bank, 90% of the 70 world-wide asset classes that it tracks (e.g. domestic equities, emerging market debt, emerging market equities, domestic real estate, commodities, corporate bonds, sovereign debt, etc.) are negative year to date. This is the largest percentage of negative returns in the past 100 years. The previous high (actually low) was in 1920 when 84% of 37 asset classes were negative. Last year, just 1% of asset classes delivered negative returns. Mr. Market simply is in the dumps---and in the end, the value of any and all financial assets is wholly dependent upon his state of mind.
Look for Mr. Market's reaction to the Fed meeting next week. In particular, keep your eyes peeled on the dot-plot; to wit, each voting member's prognostication of where interests will be over the next several months. If the consensus is that fewer than 2 rate increases are warranted in 2019, I predict an upward pop in equity prices. Mr. Market loves an accommodating Fed. If the consensus remains as it was in September, however, I see a negative impact on stock prices.
No comments:
Post a Comment