Fintech executive, writer, math geek, and investment systems developer. Founder and CEO of Altruist and Founder of FormulaFolios.

Market Update - May 14, 2013

Market Update - May 14, 2013

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.

What could possibly go wrong from here?

I suspect, quite a lot.  How soon?  Anyone's guess is as good as mine.

Barron's liked the rally late in 2012...

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.

...and they liked it a couple months ago...

...and they liked it a couple months ago...

It might be no different this time around.  Especially considering there aren't exactly a plethora of good options outside of the stock market.  Bond yields are historically low, CD's and deposit accounts pay next to nothing, annuity rates are the lowest I've ever seen, and commodities (like gold) - despite having fallen this year - are up about 500% the last 15 years.

...and still loves it today.

...and still loves it today.

So there are definitely plenty of driving forces to this rally, and despite some warning signs, it could last a while longer.  Personally, I'd prefer at least a mild correction now rather than a larger drop in the future, but markets aren't always so rational :(.

In today's market update I cover some of the warning signs, how we're watching them at my firm, and how we'll enjoy the rally as long as we can; while still keeping our foot ready to switch from the gas, to the break, should strong signs of weakness emerge.

Enjoy!!

Best,

Jason Wenk

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Tactical Asset Allocation (TAA) Update - May 2013