Commentary
-
Balancing Risk and Reward
In our previous commentary, we discussed the well known seasonal adage known as “Sell in May and Go Away.” The corollary to that is the “Halloween Effect,” which is the seasonal tendency for stronger equity returns during the months of November through April (illustrated in Figure 1).
-
The September Effect
Although the stock market adage, “Sell in May and go away” is often quoted, there is another seasonal pattern that has plagued the U.S. equity markets in recent decades. The “September Effect” refers to the tendency for the month of September to exhibit weak stock market returns.
-
Languishing Labor and Fed Tapering
It has been largely expected by market participants that the Fed would soon announce the start of tapering (reduction of asset purchases). However, the weak Nonfarm Payroll print on September 3rd has clouded the outlook for a taper timeline.
-
Shifting Tides
As we head into the Fall, uncertainty continues to overshadow the investment landscape.
-
Is Inflation Here to Stay?
In last month’s commentary, we highlighted the historically elevated level of debit balances in margin accounts. Although this metric is not incorporated into the models we employ since it doesn’t meet our criteria for being a precise timing tool, it does suggest an extreme in bullish sentiment that should give investors a reason to temper upside expectations.
-
Margin Madness
In last month’s commentary, we highlighted the seasonal adage, “Sell in May and go away.” Adding to our concern this month is a bearish signal from an important measure of investor sentiment: the recent surge in the growth of margin debit balances.
-
A Seasonal Spring Sell Setup for Markets?
Following a volatile start at the beginning of the month marked by a significant short-term pullback, the broad market was able to recover its losses and continue its ascent upwards with the S&P 500 reaching all-time highs by quarter’s end.
-
Rising Rates Cause Investor Concern
At a time when equity valuations are within striking distance of record highs, accompanied by pockets of investor euphoria, there is growing concern the recent rise in interest rates could pose a threat to the ongoing bull market in stocks and high-yield bonds.
-
Managed Income Strategy Celebrates 29 Years
Another year of positive returns is a gratifying way to mark the 29th anniversary of our Managed Income Strategy. We prefer to be modest about our accomplishments, but a performance history that encompasses nearly three decades with compelling risk-adjusted returns, warrants some celebration.
-
Markets Continue to Advance
A widespread uptick in COVID-19 cases in the U.S. and elsewhere is triggering more severe lockdowns as the year-end holiday season approaches. Ordinarily, one would expect markets to be under pressure in response to suppressed economic activity but that is certainly not the case now.
