Earlier today the stock market hit new intra-day highs for the year…then Ben Bernake, Chairman of the Federal Reserve, dropped a bomb on the markets.
The market didn’t like the news, so a 2% selloff occurred in less than 4 hours. Ouch!!
Best,
Jason Wenk
Wow, what a year it’s been for the stock market! Double digit gains in less than 4 months, a pace for 50%+ yearly gains, and very little downward volatility.
I suspect, quite a lot. How soon? Anyone’s guess is as good as mine.
Barron’s liked the rally late in 2012…
The simple fact is the market has been booming, all the main stream media seems to think it will last forever, and there’s no reason to have concern. Contrarian thinking would tell us these are signs a top is near, but there’s no guarantee of that at all. In fact, there were similar warning signs in the late 1990′s and the rally then lasted years.
Below are the most up to date allocations for the Tactical Asset Allocation model I’ve written about on the blog. For those needing a refresher on what TAA is and why I think it’s important as part of an investment plan just click here to revisit the first post.
| Stocks (Vanguard Total Stock Market ETF as proxy) | Bonds (Vanguard Total Bond Market ETF as proxy) | Real Estate (Vanguard REIT ETF as proxy) | Gold (SPDR Gold ETF as proxy) | |
|---|---|---|---|---|
| September 2011 | 0% | 55% | 7% | 38% |
| October 2011 | 0% | 62% | 0% | 38% |
| November 2011 | 0% | 60% | 0% | 40% |
| December 2011 | 0% | 58% | 0% | 42% |
| January 2012 | 0% | 71% | 0% | 29% |
| February 2012 | 4% | 57% | 9% | 30% |
| March 2012 | 17% | 58% | 12% | 13% |
| April 2012 | 17% | 55% | 18% | 10% |
| May 2012 | 16% | 61% | 23% | 0% |
| June 2012 | 5% | 69% | 26% | 0% |
| July 2012 | 13% | 61% | 26% | 0% |
| August 2012 | 13% | 62% | 25% | 0% |
If you’ve turned on financial television or opened the financial section of your local paper, you probably know the stock market has dropped a few percent the last few days. You also probably know that gold has plummeted (about 12% since last week).
Why did these drops happen? What happens next? That’s what I’m covering in today’s video market update.
Despite the recent woes of stock and commodities investments, if you’ve followed my posts on the blog, you already knew this was likely to happen. Further, if you’re following a well diversified, conservative investment plan – these recent drops haven’t impacted your portfolio at all 
.
If you haven’t followed every single post on my blog the past quarter, below you’ll find my firm’s quarterly market commentary (which I write). This can serve as a nice and quick synopsis of how our economic and investing models view the world at the moment, as well as how we’re preparing for the coming few months. It’s just a few pages, has lots of pretty graphics , and you’re welcome to share it with anyone you think might benefit.
Retirement Wealth Advisors Market Commentary – Q1 2013
Cheers,
Jason Wenk
Below are the most up to date allocations for the Tactical Asset Allocation model I’ve written about on the blog. For those needing a refresher on what TAA is and why I think it’s important as part of an investment plan just click here to revisit the first post.
| Stocks (Vanguard Total Stock Market ETF as proxy) | Bonds (Vanguard Total Bond Market ETF as proxy) | Real Estate (Vanguard REIT ETF as proxy) | Gold (SPDR Gold ETF as proxy) | |
|---|---|---|---|---|
| September 2011 | 0% | 55% | 7% | 38% |
| October 2011 | 0% | 62% | 0% | 38% |
| November 2011 | 0% | 60% | 0% | 40% |
| December 2011 | 0% | 58% | 0% | 42% |
| January 2012 | 0% | 71% | 0% | 29% |
| February 2012 | 4% | 57% | 9% | 30% |
| March 2012 | 17% | 58% | 12% | 13% |
| April 2012 | 17% | 55% | 18% | 10% |
| May 2012 | 16% | 61% | 23% | 0% |
| June 2012 | 5% | 69% | 26% | 0% |
| July 2012 | 13% | 61% | 26% | 0% |
| August 2012 | 13% | 62% | 25% | 0% |
In a recent post I explored the historical outcomes of what has happened after the stock market hits a new all time hight (with at least one year since the previous all time high). The results of the data were mostly good, which was somewhat reassuring.
But…
For some reason this recent rally just doesn’t seem right to me. As much as I’d like the market to keep chugging along, and helping investors to grow their wealth, I can’t help but wonder if there are some headwinds that could derail the rally.
As any self respecting market geek would do, I’ve been busy with some research. To keep this blog post fairly simple, I’ve identified 2 areas worth sharing in this quick study:
I’m working on a pretty in depth review of the current market rally, including some forecasts for the rest of the year. Hopefully that post will be complete over the weekend. Until then, I thought I’d at least provide a primer on the current market trend.
Below, you’ll find a S&P 500 chart that shows the “channel” stocks have been moving in as of late. As you will see, it’s been a pretty good run.
However, the market has been getting overbought for a couple weeks. I suspect, at minimum, a pull back is due.
Just click on the image for a full size view.
Yesterday (and now today) the Dow Jones Industrial Average hit a new All-Time high. This new high comes after the previous high was hit in October of 2007, about 5 1/2 years ago.
I was wondering the same thing, so using my extreme geekery, did a little research on past market highs. What I wanted to know, was what happens the next 12, 24, and 36 months afterward (historically speaking).
Marty McFly would be happy to know that new all-time highs are mostly very good for investors. No Delorean Necessary.
For those wondering what I’ve been up to and why I haven’t posted in a couple weeks, I just got back from a vacation in the Caribbean with my family. Instead of broadcasting to the world my home would be empty before leaving (don’t want to invite the robbers 
) I figured I’d just let everyone know when I got back.
Here’s a photo from our trip:
My son hanging out with his new friend in Roatan, Honduras!
In today’s video I cover the recent market drop (about 3% the past week) and the coming Sequester. For those not familiar with Sequester, it’s basically a series of budget cuts slated to begin this Friday that have been pushed down the road ever since the Debt Ceiling was raised in 2011. Unless something changes between now and Friday, $1.2 trillion in cuts will start to be phased in over the next 10 years.
Welcome to the blog of Jason Wenk; author, quantitative investment systems developer, and investment advisor.
On this site I mix business, my latest research, and a little bit of my family life. The goal is to make an impact with knowledge, but also let the world know there's more to me than just my work.
