It’s not a laughing matter; monkeys outperform most on Wall Street.
With that in mind, here’s my thoughts on the markets (where’s my banana?)
U.S. Stock Market – Like deer in headlights, most investors have yet to make any serious changes to their overwhelming thirst for financial assets. The “Don’t Worry, Be Happy” crowd that reigns throughout the financial services community, has convinced them the last couple of weeks was just a short bump in the road on the way to their riches.
The fact that they gave that advice from underneath their desk during the sell-off has no bearing on their belief.
My advice? Fool me once, shame on you. Fool me twice, shame on me!
U.S. Bonds – While Treasuries and muni’s are for the most part, the lesser of two evils versus equities, high-yield (junk) bonds are avoids at all costs. Be careful in your 401k plans and other retirement vehicles where “income” parts of the plan may have a heavy mix of high-yield bonds without you realizing it.
U.S. Dollar – It’s currently lagging the field in the worldwide race to debase currencies; but look for it to move up in the pack when our own national debt problem can no longer be pushed under the rug.
Gold – Predictions of its demise were a dime a dozen just a few weeks ago. While not quite ready to say “all-clear” just yet, the fat lady is in the building and preparing to sing for the overwhelming number of bears who will be eating their own (versus the bull meat they thought would be served).
Two consecutive closes above $1,165, followed by a close above $1,200, and its bear meat for everyone. If we break below $1,100, it’s more base-building into 2016
Oil – After hitting my long-standing target of oil in the $30s, a major technical bounce occurred. Fundamentals suggest it’s just a bounce in a deeply oversold market, but that’s how many bear markets begin a farewell tour. Stay tuned.
Final Word – There’s a generation of financial advisers who have been ween on a usually one way up market; and a public who doesn’t grasp the gravity that 85% of all money managers can’t even beat a simple index fund. One of these days these facts are going to come home to roost for more than a few days or weeks.