Thoughts {03.29.18}

Today we head into the final day of the 1st Quarter.  Stocks look poised at the open to head into the green.  There may be some emphasis on pushing them up today to make investment managers numbers look better but were looking at the first down quarter for stocks in over two years unless something big like a 3% move occurs today.  

A bad quarter may seem a bit depressing to some but it needs to be taken into context of the gargantuan move we've seen since February of 2016.  Also amidst all the volatility we've seen over the last two months the market is only trading back to where it was in November of last year.  So far all we're seeing is consolidation of those big gains.  Not necessarily a bad thing in the context of what transpired last year.  Market is becoming oversold by our work as well.

Going into yesterday the only sectors up for the year were technology {which I am long in client and personal accounts via ETFs} and consumer discretionary.  Everything else is in the red.  

I mentioned yesterday that I will be moving my office in early May.  I will keep reminding you here about this for the next few weeks.  Look for more as we move nearer to that date.

Away from the markets, Chicago is all abuzz about the Loyola Ramblers playing in the NCAA men's basketball final four.  I'll bet most folks around here didn't know until recently that Loyola won an NCAA men's basketball championship in 1963.  They know about that now.  What most didn't know about is Loyola's role in helping to break the racial color barrier in sports.  Here's a nice article about that aspect in 1963.  Go Loyola and good luck this weekend!

Also, after a long and bleak winter they're playing baseball today!  Nothing brings out the kid in me than remembering the excitement of listening to opening day baseball out of Cincinnati on WLW.  Back then all the games weren't broadcast on TV like today but opening day always was.  Many years I had teachers that would wheel in a TV so we could watch part of the game.  Back then opening day was an honor exclusive to Cincinnati as the oldest professional team in the league.  Those times have changed and all teams will play today.  Go Cubs!  Go Reds!

Back early next week.  Markets are closed tomorrow for Good Friday.

"The one constant through all the years Ray has been baseball. America has rolled by like an army of steamrollers. It's been erased like a blackboard, rebuilt and erased again, but baseball has marked the time. This field, this game is a part of our past Ray. It reminds us of all once was good and could be again."-James Earl Jones as Terence Mann in "Field of Dreams."

Thoughts {03.27.18}

Yesterday's sharp rally was a counter trend move Friday massive decline.  Most market indices  are now flat to a bit lower for 2018.  Most are lower for March.  The uptick in volatility does not seem to want to go away.  US markets are going to open higher today as well.  We'll have to see if today's rally holds.  There is a higher probability that traders might sell into the gains during the day.

I think yesterday's rally had much to do with there being little substantive in the interview that Stormy Daniels gave on 60 Minutes Sunday night about her affair with the President.  There was little that was revelatory or new in what she said about an event that took place over ten years ago when the President was a private citizen.  If I was advising Mr. Trump I'd have him acknowledge that the affair took place and then move on.  But nobody in the White House is asking me so I'll move onto a different topic as well.

The rally was also fueled by less Hawkish chatter out of the Administration on trade over the weekend and the fact that we were very oversold going into yesterday's open.  Markets are entering a zone of potential resistance now and it will be interesting to see if they can eat through that and possibly move back towards 2018's highs or if that's a ceiling that's not going to be breached for awhile.  I still think the higher probability is that we chop around now until the fall.

Oh and I think it's time to mention that I will be moving both my house and office early in May.  Posting is going to be a bit lighter as we head into that period although I'll try to chronicle my move from an investment perspective as it happens.  

Back Thursday.

Illinois

The fall election for governor in Illinois is now set as the current Republican Governor, Bruce Rauner will square off against Hyatt hotel heir J.B. Pritzker.  You can see the results here.  Both men are uber wealthy and both sunk a significant amount of their own money into the primary campaign.  Pritzker put $70 million dollars of his fortune in the democratic primary and garnered 573,679 votes votes.  It cost him $122 per vote.  Gov. Rauner put $50 million into his campaign but only garnered 361,301 votes for that amount.  Each vote cost him a bit over $138.  Whatever the amount spent the pundits are saying the fall election could be one of the costliest battles ever for a governor's race.  

We're going to pay more attention to this race in the coming months.  We're not going to do it to try to discuss politics or endorse a particular candidate but to highlight the terrible economic condition that we in Illinois find ourselves in.  To me, this election may be the last significant chance the state has to set things right.  We already have one of the highest tax burdens of any state in the country and I don't see how that isn't going to get much worse down the road.  What we'll do is highlight the issues going forward and present the candidates positions as they are defined in the coming months.  We will not editorialize or endorse.  We will just lay out facts.  We're going to do this because the majority of our clients live in Illinois and the decisions that will be made in the next few years are going to significantly impact their lives.  Our goal is to give them the tools to analyze what the economic consequences of this election may mean for them.  The rest of our readers can take a back seat when we run these posts and be glad they don't have some of our problems.  

Look for this starting next week.

Back Monday.

What Do We Need To Accept About The Market in 2018?

Markets have certainly seen an uptick in volatility in the early months of 2018 with markets gyrating often hundreds of points in a single day.  Of course a hundred points on the major indices today is not what it once was on a percentage basis.  However, it is obvious that we are not operating under the same template when it comes to the markets that we saw last year.  Trying to game plan for the rest of the year, given what we currently know, means examining a series of different scenarios and assigning a certain probability to each. 

I think the most likely scenario is for stocks to spend much of 2018 consolidating their gains from the past two years.  The positives of underlying economic growth we are seeing and gains from the tax cuts runs into the worries of higher stock valuations, higher interest rates and higher inflation.  Also as the year ages we may need to weigh political risk into the equation from the upcoming mid-term congressional elections.  Once we get into the fall and once the outcome of the elections are priced into stocks there is a possibility we again attack the old highs from January.   Now obviously it is unlikely the year will pan out exactly as I've drawn the lines.   Still it seems there is a higher probability that a scenario similar to this unfolds.  In that kind of environment investors should prepare for higher volatility and a possible retest of February's lows at some point.  We've discussed other possibilities and outcomes over at our blog.  You can read about them here.

Given the kind of environment we may have entered I think investors need to do the following:

Accept that things may have changed.  Accept that there's a higher probability that stocks are not going to go straight up like we saw last year.  Accept that there's a higher probability of more volatility and that stocks may have seen there highs if not for the year then at least for some period of time back in January.  Accept that consolidation of gains is part of the process and just because we are not going up right now doesn't necessarily mean the bull market is over for stocks.  Learn to live with days where the major indices can drop 2-3%.  Again understand this is part of the process and the press will play this up.  A 500 point drop or even a 1,000 point drop today in the Dow Jones Industrial Average* gets a lot of headlines but doesn't mean what it once did in terms of percentage gains or losses.

Accept that you could take a look at your portfolio some time this year and see it down 10-15% or perhaps even more.  A 10-15% decline is historically what has been considered normal volatility for stocks.  It's been so long since we've seen that sort of drop that investors could easily be spooked if it should return or if we see something worse.  A decline of that magnitude would not necessarily mean the bull market is over or that we are necessarily going to see a larger drop in stocks.  Like everything else it would need to be viewed in the context of how it occurred.  Just know this is possible and a much more probable event given the current trading environment.

Accept that things may be changing in terms of market leadership.  We may not know if that's the case for many months.  If so then there should be time to address such a change unless we get some unexpected event over the transom.

Use market volatility to your advantage to either rebalance or reposition your portfolio if necessary.

Know what you own or how your portfolio is set up.  If the current volatility and more corrective conditions are keeping you up at night then you need to review your current risk/reward criteria.  If you're one of my clients then we need to discuss this.  If not, then talk to your financial advisor.  If you don't use one then honestly look yourself in the mirror or hire me!

Finally I would also say that you should take care that you're comfortable with where you have money invested that you might need in the next 6-18 months.  Choppy markets have a habit of seeing the most volatility when you might need the money the most.  For example, if you have a child entering college this fall and you've been able to save enough to pay for your share of the bill, then you might want to make sure that at least the first semester's tuition is invested in something right now that won't necessarily be subject to a market correction.  Of course this is an example and the situation will vary according to each person's needs.  An easy way to evaluate this is ask yourself in terms of money you might need in the short term what hurts more.  Would it bother you more to miss a 10% move up with money you might need soon or would the opposite hurt most?  If losing that 10% stings the most then think about getting more defensive with that money.

As I've also written recently I don't believe the bull market we've been in since 2009 is over but I also think there's a higher probability of markets hitting the pause button for a bit.  That is a normal part of the process.  If your comfortable in that analysis then perhaps nothing needs to be done but a bit of rebalancing or repositioning as the year progresses. 

Let me note my belief that  the biggest risk markets face would be an unexpected event washing over the transom.  One possible thing to now watch out for is rising political risk in the United States.  The President is no stranger to controversy and seems to thrive in a chaotic atmosphere that might unnerve others.  Whether fair or not the cumulative mounting evidence of discord in the current Administration has the potential to impact markets, particularly if the Administration starts to promote policies that are perceived to be unfriendly to stocks.   I also think so far it is underappreciated the higher probability that the Democrats could regain control of both the House of Representatives and the Senate this year.  In that case, we could find many of the Administration's policies either blunted or overturned.  It is not impossible to imagine a Democratically controlled legislative branch contemplating impeachment proceedings against the President.  None of this is meant to be political commentary.  I'm writing this to point out that rising political risk is perhaps not yet quite as appreciated in the markets or by investors.  I think it is something that bears watching as the year  advances. 

Away from this it is possible some of the President's personal problems  could mount a political toll that starts to impact either the economy or the markets.  Speaking of the President's personal life - let's discuss mixed drinks.   A Dark and Stormy is a form of cocktail using dark rum and ginger beer.  I'm not a fan but I have a brother-in-law who will drink one occasionally.  He thinks they're great.  The adult movie star Stormy Daniels may become a darker threat to the Trump Administration as the weeks pass. I'm assuming that all of you are familiar with Daniels' claim of an affair with the President and the alleged hush money she was paid in order to keep quiet about it.  As it is all over the press.  I don't right now see too many speculating on what happens if Miss Daniels is able to go out and tell her story unfettered of any potential hush agreement.  We don't know what details she might reveal or what proof she might have of an alleged affair.  We do know that many of the President's enemies are working as hard as possible to see that she gets heard and she has taped an interview with "60 Minutes".  She has also supposedly offered to give the alleged "hush money" back in an effort to go public with what she knows.  None of this will likely be flattering to the President if the story unfolds.

The last time we had issues of a President having an affair we almost had a President impeached.  It is hard to measure how this might damage President Trump or the Republicans going into the fall elections but markets don't like political scandals and are even more leery of these if they morph into a constitutional crisis.  Last week in a column I mentioned that the President's mounting personal problems could take a political toll that starts to impact stocks.  So far this does not seem to be the case but the crescendo behind Miss Daniels is only growing.  Something to keep an eye out for if these storm clouds become more intense.

And if you want a recipe for a Dark & Stormy click here!

Back Thursday.

*Long ETFs related to the Dow Jones Industrial Average as part of legacy positions in certain client portfolios.   Positions may change at any time without notice.

Chart Talk {03.19.18}

Here's an updated chart of the S&P 500, again fromTradingview.com.  The markets have basically chopped around the past month or so, although they are higher than their lows back in early February.   One thing to watch and perhaps also a clue to future short term market direction is to pay attention to how the index reacts to either set of trendiness we're showing on this chart.  The one on top is a downward sloping line from the January highs and the other is an upward sloping line from the February lows.  These lines are going to converge in the not to distant future.  Traders pay attention to these things as they can be predictive of whether markets are going to advance or decline.  If markets continue to just flop around one of these lines will be violated by the end of March.  Something to pay attention to.

S&P 500 is up about 3% for the year so far.  Money flow readings are currently neutral.

Long ETFs related to the S&P 500 in client and personal accounts.  Short S&P 500 in a personal account as part of a separate individual strategy.

St. Patrick's Day 2018

There are no little Irish dancers left for me to ferry about these days and so I find the first three weeks of March to be a low key period as opposed to all the hustle and bustle that used to come with "the season" as it's called in Irish Dance circles.  Fact is the Chicago area is home to well over a million people who claim some form of Irish ancestry and if you're an Irish dancer in March and you can't find a gig then you're in the wrong activity.  Time was I spent most nights in early to mid-March squiring a gaggle of young ladies to their next performance.  I think I've been in every West Side and North Side parish, Union Hall,  hotel and even the WGN studies during that period.  

While that part of my life has passed into happy memory we still honor St. Patrick's Day around here so I thought I'd update and reprint 10 facts about the Irish, the parade or about Ireland which are not well known. Just trying to have some fun with the season and we will get back to more serious matters soon. Irregardless if you are 100% Irish, part Irish (like my family) or just Irish For The Day- Cead Mille Failte!

1) Ireland is slightly larger than West Virginia. If it were part of the U.S. it would rank approximately 19th in terms of population between Wisconsin and Maryland according to 2000 census figures.

2) The Gross Domestic Product of the U.S. is in excess of $11 Trillion dollars & is ranked 1st in the world. Ireland is ranked 30th at $183 billion dollars. Chicago's GDP has been estimated at around 380 Billion.

3) According to the Chicago Tribune, "Corned Beef and Cabbage" is an Irish-American staple and more Budweiser is consumed in Ireland than Guinness.

4) Musicians with Irish ancestral ties include Paul, McCartney, John Lennon & George Harrison of the Beatles; Bruce Springsteen & Keith Richards.

5) 17 American Presidents have Irish Ancestry. This list not only includes obvious Presidents such as Kennedy and Reagan but also includes Andrew Jackson, Both Bush's, Bill Clinton and President Obama. Until the election of Donal Trump, every elected President since 1960 claimed Irish ancestry.

6) New York City has the largest St. Patrick's Day parade in the world. Last year more than 150,000 marchers participated and it attracted roughly 2 million viewers. That is roughly 500,ooo more souls attended the parade than the combined populations of Dublin, Belfast, Limerick & Cork.

7) Michael Flately of Riverdance fame is credited with popularizing Irish Step Dancing around the world. It is widely assumed that Flately is a native of Ireland but in fact he was born and raised right here in the Chicago area. Perhaps because of this it is claimed that over 100,000 young women in Chicago and its surrounding environs actively participate in some form of Irish Dance.

8) George Clooney, Harrison Ford, Mel Gibson, Gregory Peck, Barbara Stanwyck, John Travolta, Spencer Tracy, Judy Garland & John Wayne all had Irish ancestors.

9) Guinness & St. Patrick's Day seem to go hand in hand. (At least they do in my neck of the woods). They also have a side business of that World Record Book. Almost 2 billion pints of Guinness are served each year. More Guinness is served on St. Patrick's Day than on any other day of the year.

10) Finally the best for the last. It is claimed that Ireland has never had a population greater than about 8 million people. The Irish have emigrated all over the world. The majority of their descendants are found in Canada, the U.S., Australia, New Zealand and the United Kingdom. 55 million Americans claim Irish Ancestry. Their descendants can also be found in more unexpected places like Chile, South Africa, Mexico, Argentina and even China. Former Mexican President Vincente Fox is of Irish ancestry. Altogether it is estimated that perhaps as many as 100 million people can trace some part of their family tree back to Ireland. This is over fourteen times the population of the island of Ireland itself!

Back Monday!

Go Read

Go read "Why ETFs Spell the End of Hedge Funds".  It is an interesting article although I find the premise that all hedge funds are going to go away, drowned as it were in the ETF tide a bit too simplistic.  First some hedge funds are quite good at what they do and have the long-term records to prove it.  Unfortunately for most qualified investors these funds are usually closed to new money.  2nd there will always be hedge funds that utilize strategies that the ETF market cannot or won't replicate.  Finally slick talkers with snappy slides and pretty presentation books will always be able to raise money even if their results don't ultimately match what they've promised.  It's been that way since mankind invented currencies and assets.

Better I think to say that the ETF industry's continued growth and branching out into newer and more exotic strategies likely means the hedge fund industry is going to be much smaller in the next ten years than it is today.

I'm traveling the rest of this week and will post again sometime early next week.

A Dark & Stormy

A Dark and Stormy is a form of cocktail using dark rum and ginger beer.  I'm not a fan but I have a brother-in-law who will drink one occasionally.  He thinks they're great.  The adult movie star Stormy Daniels may become a darker threat to the Trump Administration as the weeks pass. I'm assuming that all of you are familiar with Daniels' claim of an affair with the President and the alleged hush money she was paid in order to keep quiet about it.  If this is the first you've heard of this then either you've been off the planet, don't pay attention to the news or aren't connected to the internet.  I'm not interested in the politics of this but I do want to point out the potential impact this could have on stocks should this blow up into a larger political scandal.

I don't right now see too many speculating on what happens if Miss Daniels is able to go out and tell her story unfettered of any potential hush agreement.  We don't know what details she might reveal or what proof she might have of an alleged affair.  We do know that many of the President's enemies are working as hard as possible to see that she gets heard and she has taped an interview with "60 Minutes".  She has also supposedly offered to give the alleged "hush money" back in an effort to go public with what she knows.  None of this will likely be flattering to the President if the story unfolds.

The last time we had issues of a President having an affair we almost had a President impeached.  It is hard to measure how this might damage President Trump or the Republicans going into the fall elections but markets don't like political scandals and are even more leery of these if they morph into a constitutional crisis.  Last week in a column I mentioned that the President's mounting personal problems could take a political toll that starts to impact stocks.  So far this does not seem to be the case but the crescendo behind Miss Daniels is only growing.  Something to keep an eye out for if these storm clouds become more intense.

And if you want a recipe for a Dark & Stormy click here!

PS.  Don't underestimate the impact this could have on the President's political capital.  Many Trump supporters are folks with views on morality are polar opposites of the President's.  So far they've overlooked his personal life as his vision for America aligns with what they'd like to see.  It's not hard to imagine some of that support eroding if we are treated to a more graphic spectacle of the President's private life, especially if a wounded President starts leaning away from some of his promises to "red state" America in order to survive in office. Stay tuned.

A Bit Of An Overhang

One thing that may bring a bit of an overhang to stocks for some time is that it seems retail investors became the most enthusiastic about buying stocks late last year and back in January.  This from the Wall Street Journal about a month ago:

"After sitting out most of the nearly nine-year bull market, individual investors are finally pouring in.  Discount brokerages TD Ameritrade Holdings Corp., E*Trade Financial Corp.  Charles Schwab Corp. reported surges in client activity at the end of 2017 that have accelerated in January. The firms attributed much of the activity to retail, or individual, investors who are opening brokerage accounts for the first time, some of them lured by the boom in cryptocurrency and cannabis investments.
“There’s pent-up activity and some element of the fear of missing out,” said Devin Ryan, a brokerage analyst and managing director at JMP Securities LLC, especially among younger investors as the stock market continues to hit highs."

If this ends up being a longer-term top in stocks then it will be another classic example of individual investors getting into stocks at exactly the wrong time, much as like back in late 1999-early 2000 and again in 2007.  One thing missing except in the cryptocurrencies and marijuana stocks is any sort of obvious speculative excess in the public domain.  There so far aren't any crazy daytrader commercials on TV and my email inbox isn't stuffed full of "can't miss" investment systems promising to make me a fortune.  This makes me think that while a certain segment of the population may have bought in as stocks were making some sort of top, the rest of the world may not have been quite as headstrong.  Older investors still have wounds that sting from the last bear market.

What this does mean though is that there is a bit of an overhang to stocks.  Many buyers from earlier in the year are holding losing positions and those positions will likely need to be worked through before stocks can broadly advance again.  I mean that an investor holding a position with say a 5% loss right now is more interested in getting back to break even than whether or not he or she will make money.  Often times that losing position gets sold the closer it gets to neutral.  That means there's a natural barrier of sellers at higher prices looking to be made whole who could be sellers if stocks at some point get back to the levels where these positions were purchased.  This creates a barrier or resistance at higher prices that often needs time for it to be corrected. 

Something to watch for as stocks try to advance.

Back next week.  I will be traveling much of the week and will only be posting either Monday or Tuesday.

The publicly traded brokerage firms named above are underlying positions in certain ETFs held by my firm in both client and personal accounts.  

One Thing To Consider

I have given my opinion since the beginning of February that the highest probability is that we are in a consolidation phase of the current bull market.  The biggest risk to that thesis would be an unexpected event washing over the transom.  One possible thing to now watch out for is rising political risk in the United States.  This week the President has induced more chaos into the system by deciding to impose tariffs on steel and aluminum.  In response one of his chief economic advisors, Gary Cohn, has decided to resign.  The Street is not happy about this news today and markets have initially opened lower because Cohn is a Wall Street man, formerly a Goldman Sachs partner.  I will let others discuss the economic issue of tariffs and others can opine on the long term impact of Cohn's departure.  While I think these events could ruffle feathers shorter term, I believe they are drawing attention away from the political risk that may become more apparent as we head further into the year.

The President is no stranger to controversy and seems to thrive in a chaotic atmosphere that might unnerve others.  Whether fair or not the cumulative mounting evidence of discord in the current Administration has the potential to impact markets, particularly if the Administration starts to promote policies that are perceived to be unfriendly to stocks.  

Away from this it is possible some of the President's personal problems as well as the ongoing investigations into possible ties to Russia could mount a political toll that starts to impact either the economy or the markets.

Finally I think so far it is underappreciated the higher probability that the Democrats could regain control of both the House of Representatives and the Senate this year.  In that case, at best, we could find many of the Administrations polices either blunted or overturned.  It is not impossible to imagine a Democratically controlled legislative branch contemplating impeachment proceedings against the President.

None of this is meant to be political commentary.  I'm writing this to point out that rising political risk is perhaps not yet quite as appreciated in the markets or by investors.  I think it is something that bears watching as the year  advances.  

Back Friday.

What To Do Now

Markets worldwide were up at the open on news out of North Korea that they are willing to hold discussions with the United States on its nuclear weapons.  If true, and not an effort on that regime to stall for further time, it would be a welcome development.  Just as quickly as they were up on the open we've seen a sell-off since as tariff tensions again have come into focus. The last few days of declines was erased yesterday mid-morning as markets had become enough oversold in the short run that stocks had enough fuel to rally.  So far there's been no follow through from the morning's start but the day is only half over so things could change. 

Irregardless, I think it is important to recognize that we are in a different market regime now.  The lazy halcyon days of market advances that have occurred since President Trump was elected for now seem to be a thing of the past.  Volatility has returned and market day-to-day trading currently has no connectivity to it.  Stocks can advance one day and give it all back on the open the following morning.  Also, just when the bears seem to have the advantage over stocks we get these 2-3% rallies that stifle the negativity for at least a bit.  In short right now neither the bulls or bears seem to have the advantage In that void volatility reigns supreme.  If you've read some of what I've written recently then you know I think there's the potential for this to last for some period of time.

Given the kind of environment we're in I think investors need to do the following:

Accept that things may have changed.  Accept that there's a higher probability that stocks are not going to go straight up like we saw last year.  Accept that there's a higher probability of more volatility and that stocks may have seen there highs if not for the year then at least for some period of time back in January.  Accept that consolidation of gains is part of the process and just because we are not going up right now doesn't necessarily mean the bull market is over for stocks.  Learn to live with days where the major indices can drop 2-3%.  Again understand this is part of the process and the press will play this up.  A 500 point drop or even a 1,000 point drop today in the Dow Jones Industrial Average* gets a lot of headlines but doesn't mean what it once did in terms of percentage gains or losses.

Accept that you could take a look at your portfolio some time this year and see it down 10-15% or perhaps even more.  A 10-15% decline is historically what has been considered normal volatility for stocks.  It's been so long since we've seen that sort of drop that investors could easily be spooked if it should return or if we see something worse.  A decline of that magnitude would not necessarily mean the bull market is over or that we are necessarily going to see a larger drop in stocks.  Like everything else it would need to be viewed in the context of how it occurred.  Just know this is possible and a much more probable event given the current trading environment.

Accept that things may be changing in terms of market leadership.  We may not know if that's the case for many months.  If so then there should be time to address such a change unless we get some unexpected event over the transom.

Use market volatility to your advantage to either rebalance or reposition your portfolio if necessary.

Know what you own or how your portfolio is set up.  If the current volatility and more corrective conditions are keeping you up at night then you need to review your current risk/reward criteria.  If you're one of my clients then we need to discuss this.  If not, then talk to your financial advisor.  If you don't use one then honestly look yourself in the mirror or hire me!

Finally I would also say that you should take care that you're comfortable with where you have money invested that you might need in the next 6-18 months.  Choppy markets have a habit of seeing the most volatility when you might need the money the most.  For example, if you have a child entering college this fall and you've been able to save enough to pay for your share of the bill, then you might want to make sure that at least the first semester's tuition is invested in something right now that won't necessarily be subject to a market correction.  Of course this is an example and the situation will vary according to each person's needs.  An easy way to evaluate this is ask yourself in terms of money you might need in the short term what hurts more.  Would it bother you more to miss a 10% move up with money you might need soon or would the opposite hurt most?  If losing that 10% stings the most then think about getting more defensive with that money.

As I've also written recently I don't believe the bull market we've been in since 2009 is over but I also think there's a higher probability of markets hitting the pause button for a bit.  That is a normal part of the process.  If your comfortable in that analysis then perhaps nothing needs to be done but a bit of rebalancing or repositioning as the year progresses.  If you're having some trouble sleeping at night then the above steps might help.

Back later in the week.

*Long ETFs related to the Dow Jones Industrial Average as part of legacy positions in certain client portfolios.   Positions may change at any time without notice.

Thoughts {03.02.18}

Some things I've seen that I thought I'd share as we transition from winter into early spring and from February into March.  

The major indices lost between 3-5% in February making last month one of the worst we've seen in quite a while.  Of course this has to be viewed in the context that January saw gains of about 6-7% or almost a year's worth of average return in one month.  Go read, "LA Times: "Stocks Close Down, Making February the Worst Month in Two Years for the Market".

From the New York Times, "The (Long) List of Financial Documents You Should Keep".

Believe it or not there is actually a brewing housing shortage in the US.  All those years when nobody built anything for anybody except in the luxury market are catching up with all those millennials who want to start having kids!

We'll be back next week and "finally" do that last piece on portfolios given current volatility.  We'll also at some point discuss what we've seen this past week with stocks.  I am in and out these next two weeks so posting may be less frequent.  Enjoy your weekend.