This Week in the Market
With Scott McCaghren and Tony LaPorta
As noted in last week’s commentary, investors continue to be conflicted with the “yo-yo” type of price action that equity markets have endured as of late. We believe that this type of environment is not likely to change in the near future. We do still maintain our moderately bullish outlook through September with periods of sharp volatility. The last five sessions have been very indicative of what we would anticipate the next 8-9 months could look like moving forward. Investors in general will be constantly questioning whether a top has been achieved with a correction to follow. While this very-well could happen, we are not looking for that just yet. We are leaning heavily on the statistical nature of years such as this to determine our objective into September. The statistics have allowed for a portfolio construction that will enjoy upside potential while providing some volatility overlay during periods of brief downturns.
The current models have been specifically designed for the type of environment discussed above.
You will notice in the audio portions of the commentary how we continually reference “taking it one day at a time”. There are many geopolitical events floating around that can be anticipated from a date standpoint, but there are also some that cannot. This is precisely why we have built the portfolios in that manner in which we did. There are several components that can respond quickly to brief downturns in the equity markets while other components maintain the upward trajectory. These allocations can and will change throughout the year as the landscape evolves; whether it be planned events or unplanned news announcements (coronavirus/Middle East). Taking it one day at a time allows for the agility that will be needed at the extended levels that the markets have found themselves.
As always, we continue to monitor all equity, treasury, commodity and currency conditions in order to efficiently deploy capital as well as protect invested assets.
Click the link to listen to Scott and Tony discuss this week's market
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