The Prudent Retiree - October 2018
“The British are coming! The British are coming!”
- Paul Revere
Legend credits Paul Revere with one of the most famous warning cries in all of history. He supposedly warned the colonists in Concord on a daring midnight ride that an attack was imminent, thus saving the day and turning the tide of the Revolutionary War.
The truth is that Paul Revere never made it to Concord. He was captured on the way, his horse was taken and he walked home to Lexington when set free. He did, however, manage to warn Lexington and helped to avert disaster there. Samuel Prescott actually warned Concord. We don’t know why the poet Henry Wadsworth Longfellow didn’t credit Samuel Prescott with the midnight ride.
The market’s decline in October has prompted many warnings. The ___________ are coming! The ___________ are coming! Fill in the blanks—tariffs, the Fed, higher interest rates, the midterm elections, Saudi Arabia, Trump’s taxes, Elizabeth Warren. The choices seem endless.
The truth is that the markets have corrected about 5% from their all-time highs. Pull backs are normal in any upward market cycle. There is no compelling reason to believe the market is starting a 2008 magnitude crash. The economy is strong, unemployment is near record lows and corporate earnings are booming. Our risk management model remains positive. The bear has not yet made it to Concord.
We don’t make predictions. When the market itself makes it to Concord, we will recommend a change. We are also watching in case the market goes to Lexington instead. That would also sound the alarm. In either case, we’ll give a warning cry as we have in the past. For now, Prudent Retiree remains invested.
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Horseman Group – 3 CityPlace Drive - Suite 290 – St. Louis, MO 63141 – 314.692.7842 – www.horsemangroup.com
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. Investing involves risk including loss of principal. No strategy assures success or protects against loss.