You are probably wondering why there is such a disconnect between the bad news in the world and the ever chugging ahead of the stock market. News such as a disgraceful exit from Afghanistan is uncontainable. We can all see that some of the inflation is not transitory such as grocery and energy costs. There are chip shortages which are affecting the manufacturing of all kinds of goods and creating inventory back logs like we have never seen before. There is a labor shortage that is also causing huge problems in getting goods produced. The government printing and spending money like a drunken sailor is also a concern that probably could cause more inflation concerns in the future. All of this is called “Headline Noise”.
These are just some of the current concerns that have investors climbing the “wall of worry”. As investors there will always be something to worry about. Last year it was a pandemic. This year it is something entirely different. Going back over the last 100 years, the stock market has outperformed almost every type of investment. Thus far in 2021, the S&P 500 has achieved 55 new all-time highs with 13 alone in August!! As for the positioning of our managers/signal providers in their respective strategies on our platform, all are unequivocally bullish/risk-on. The Chartist Mutual Fund Newsletter (dated 9/2/21) included this succinct summary of the current equity environment. As with The Chartist, we also let the market be our guide and try to ignore the headline noise.
Typically, the 4th quarter is the strongest quarter of the year. In my opinion, the economy is still rebounding. The VIX index is a great measure of the volatility of the stock market. It currently is calm and is signaling what appears to be a very good 4th quarter. As always, we are watching your account closely and will make adjustments as necessary. Thank you for the confidence you have in us. We let the market itself be our guide.