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Joe Fahmy's take on the market. Opening sentence: "For the past month, I've been telling people that the market is going much higher and they all look at me like I have 3 heads and I'm speaking a foreign language."
Being expensive as stocks are today, with as reported earnings at a TTM P/E Ratio of 23.8 (as reported in the WSJ), for the S&P 500 Index; I will be a seller into any major rally above a reading of 2075. Just recently I trimmed my equity allocation from about 53% downward to 51%. According to my equity allocation matrix barometer I should be at about 49% equity as this matrix determines my allocation to equities based upon the S&P 500 Index's price, earnings (both reported and estimated) along with some technicals. Folks, stocks, in general, are not cheap and as along as investors are willing to keep bidding stock prices upward thus paying more for a dollars worth of earnings stocks most likely will remain pricey.
Let's see now ... If the Index were to rise another 20% from its current level then that would put its valuation somewhere around 2490 by my math. I just do not think this will come to be anytime this year; however, I do think a new 52 week high will be reached sometime during the year. Also, I think there is more risk for downside movement than upside. Frankly, I am looking for another pullback and I believe this jent is simply trying to talk the market upward. We have major elections coming; and, I just do not think the markets will find good favor in coming election activity and perhaps with our next elected president.
I think US market is performing better than other parts of the world, and the money follows that trend. The earning season is around the corner while the corporate profits have been declining for several consecutive quarters, and that does not bode well for their valuation. Thus, I agree with Old_Skeet's assessment and pare back a bit as the market move higher.
Joe says: "I am one of the only people on Wall St calling for a 10-20% rise this year and here are my 4 reasons the Dow will reach 20,000 by year-end"
Dunno. Can't argue with the guy. We're at nearly18,000 on the Dow now. So 20K isn't that far away. I remain slightly positive and slightly overweighted equities. Than again ... I'm still predicting Jeb will be the Republican nominee.
Comments
Let's see now ... If the Index were to rise another 20% from its current level then that would put its valuation somewhere around 2490 by my math. I just do not think this will come to be anytime this year; however, I do think a new 52 week high will be reached sometime during the year. Also, I think there is more risk for downside movement than upside. Frankly, I am looking for another pullback and I believe this jent is simply trying to talk the market upward. We have major elections coming; and, I just do not think the markets will find good favor in coming election activity and perhaps with our next elected president.
https://www.washingtonpost.com/politics/in-turmoil-or-triumph-donald-trump-stands-alone/2016/04/02/8c0619b6-f8d6-11e5-a3ce-f06b5ba21f33_story.html
Dunno. Can't argue with the guy. We're at nearly18,000 on the Dow now. So 20K isn't that far away. I remain slightly positive and slightly overweighted equities. Than again ... I'm still predicting Jeb will be the Republican nominee.