- 1.January 2016 Advisory Commentary
- 2.February 2016 Advisory Commentary
- 3.March 2016 Advisory Commentary
- 4.April 2016 Advisory Commentary
- 5.May 2016 Advisory Commentary
- 6.June 2016 Advisory Commentary
- 7.July 2016 Advisory Commentary
- 8.August 2016 Advisory Commentary
- 9.October 2016 Advisory Commentary
- 10.November 2016 Advisory Commentary
- 11.June 2017 Advisory Commentary
- 12.August 2017 Advisory Commentary
- 13.September 2017 Advisory Commentary
- 14.October 2017 Advisory Commentary
As we enter September with continued market gains, it’s still important to remember that it has been 14 months since the S&P 500 experienced a 5% sell-off and 19 months since the market had a correction of 10%. The rubber band continues to seem very stretched at this point in time.
In the middle of the month, we took the market’s lull as an opportunity to pull back on our high yield bond and hedged equity exposure and reposition into more short-term investment grade corporate bonds and more traditional growth and value style equities. We are becoming more concerned about the increasing valuations in the high yield space and view unhedged stock exposure as a more effective allocation to take advantage of any market melt up that may occur.
We continue to maintain our position in gold as it has been outpacing the S&P 500 and the Dow Jones Industrials since the beginning of 2017. Gold at this point may be seen not only as a hedge against what the Fed and other central banks are doing, but also as a thermometer on the overall market’s health. It’s hard to see how gold could be gaining this much ground if the true health of the economy and the market was as good as it’s being portrayed in the mainstream press.
Fun Fact #1 – there has been $1.96 trillion of central bank purchases of financial assets in 2017 alone, as central bank balance sheets have grown by $11.26 trillion, to a total of $15.6 trillion, since Lehman Brothers collapsed. (Goldman Sachs 8/26/17)
Fun Fact #2 – Over the last 10 years, S&P 500 companies have returned more money to shareholders via share buybacks and dividends than they’ve earned. (FactSet 8/29/17)
Fun Fact #3 – At $8.6 trillion, U.S. corporate debt levels are 30% higher today than at their prior peak in September 2008. (Mauldin Economics 9/2/17)
Fun Fact #4 – At 45.3%, the ratio of U.S. corporate debt to GDP is at historical highs, having recently surpassed levels preceding the last two recessions. (Mauldin Economics 9/2/17)
Brian Weckman, RFC
Chief Investment Officer
Actis Wealth Management L.C.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The economic forecasts may not develop as predicted and there can be no guarantee that strategies promoted will be successful.