We’ve had a few emails come in regarding the current market behavior so we thought we’d send out a mid-week update. First of all, the one guarantee you have with the markets is that they move around on a daily basis. Over the past 15 months we’ve seen the markets advance without any real downturns. However, we’ve just seen the true definition of a flash crash, i.e. an unexpected speed bump where out of the blue the market has a sudden and steep sell off. I’ve seen these numerous times with the most recent being the Brexit vote in June 2016. Then there was the intraday flash crash in May 2010. Going back to Black Monday on 19 October 1987, the Dow fell exactly 508 points to 1,738.74 for a loss of 22.61 percent. It stands out to me because I remember being on a flight from Virginia Beach to San Diego and seeing the news upon landing. Well, over the last few days we’ve had over 500 point daily losses, but the Dow is trading at 25,000, not 1,700. Yes, there’s been a loss in account values but nothing near the percentage losses of the past. And what I’ve also learned about these events is that there is not a warning signal, and that they usually recover pretty quickly. When you look at these events, you have to ask “What has fundamentally changed between yesterday and today to cause this?” The answer is usually nothing. Earnings and other economic news still look good, although we’ve had a slight rise in interest rates. But still, do you want to move your money out of equites and into bonds returning 3 percent? If you take a step back and look at it from an investing, not trading perspective, we still have some nice upward momentum validated by double digit annual returns. So now you’re probably asking, “When would we start taking some money off the table?” Since we utilize a Trending Investment Portfolio Strategy (TIPS), we’ll let the markets settle out this week and take a look at where it finishes in relation to its 50 day moving average. If below we’ll probably take some gains and reduce equity exposure, but if above, we’ll stay the course. Lastly, we do appreciate you subscribing to TSP TIPS and wanted to provide this feedback to you in order to let you know what we’re thinking. If you have any other questions please feel free to send us an email. You can also check out more information regarding our strategies at weisertinvestments.com. Thanks for hanging in there. VR Justin and Roy
We’ve had a few emails come in regarding the current market behavior so we thought we’d send out a mid-week update. First of all, the one guarantee you have with the markets is that they move around on a daily basis. Over the past 15 months we’ve seen the markets advance without any real downturns. However, we’ve just seen the true definition of a flash crash, i.e. an unexpected speed bump where out of the blue the market has a sudden and steep sell off. I’ve seen these numerous times with the most recent being the Brexit vote in June 2016. Then there was the intraday flash crash in May 2010. Going back to Black Monday on 19 October 1987, the Dow fell exactly 508 points to 1,738.74 for a loss of 22.61 percent. It stands out to me because I remember being on a flight from Virginia Beach to San Diego and seeing the news upon landing. Well, over the last few days we’ve had over 500 point daily losses, but the Dow is trading at 25,000, not 1,700. Yes, there’s been a loss in account values but nothing near the percentage losses of the past. And what I’ve also learned about these events is that there is not a warning signal, and that they usually recover pretty quickly. When you look at these events, you have to ask “What has fundamentally changed between yesterday and today to cause this?” The answer is usually nothing. Earnings and other economic news still look good, although we’ve had a slight rise in interest rates. But still, do you want to move your money out of equites and into bonds returning 3 percent? If you take a step back and look at it from an investing, not trading perspective, we still have some nice upward momentum validated by double digit annual returns. So now you’re probably asking, “When would we start taking some money off the table?” Since we utilize a Trending Investment Portfolio Strategy (TIPS), we’ll let the markets settle out this week and take a look at where it finishes in relation to its 50 day moving average. If below we’ll probably take some gains and reduce equity exposure, but if above, we’ll stay the course. Lastly, we do appreciate you subscribing to TSP TIPS and wanted to provide this feedback to you in order to let you know what we’re thinking. If you have any other questions please feel free to send us an email. You can also check out more information regarding our strategies at weisertinvestments.com. Thanks for hanging in there. VR Justin and Roy