The Prudent Retiree: Fall Market Outlook Summary
“What, me worry?”
- Alfred E. Neuman, Mad Magazine
Horseman Group just concluded their fall market outlooks. We wanted to recap the questions you asked and our thoughts about the market’s outlook.
Though the market has been extremely volatile, our stance remains favorable. Underlying economic indicators are bullish and our risk management model continues to be positive.
Many of you asked about the situation with trade and China. Our thoughts on that issue are essentially the same as they have been for the last year or more. Negotiations have at times been fraught and that has contributed to market volatility. Since we are near all time highs, the sense of the market is that a deal will be reached.
The economy continues on a strong course. GDP growth is consistent and unemployment is at a 50 year low. We are in a record post war expansion and wages are increasing. Inflation remains well below the Fed’s target rate of 2%. Interest rates have decreased this year and appear to be moving lower. This is all very positive for economic growth and the market.
Other questions were about politics, impeachment, the upcoming election and how these might impact the market. History tells us that the market does not have a favorite party. As far as impeachment goes, we can look to the examples of Nixon and Clinton. The market fell 33% the year after President Nixon left the office. We were in a recession at the time with double digit interest rates. In the year after President Clinton was impeached, the market increased 39%. We were experiencing strong economic growth and employment. The only real lesson here is that the economy more than current politics drives the market.
In summary, we remain positive on the market and recommend maintaining current investment positions.
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Horseman Group – 3 CityPlace Drive - Suite 290 – St. Louis, MO 63141 – 314.692.7842 – www.horsemangroup.com
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any ndividual. All performance referenced is historical and is no guarantee of future results.
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