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September 30, 2022 - OK . . . I’m on my soap box this week. The chart is called a Relative Strength chart because all securities start off at the same zero percent point on the left and show relative performance over the same time frame and the scale on the right is percent change. Apples to apples so to speak. * (time frame is over the past year to date)* Take a look at the chart.
Ever since early this year the stock and bond market have not been the place to invest money. Yeah, I know, that’s 20/20 hind sight but my point is: is it now the place to invest? I don’t see much of any redeeming feature in that chart, plus the overall economic situation does not appear to be getting better. So why would anyone suggest buying stocks or bonds in this market regime? While it’s true that Utilities, Energy and some other select defensive stocks have well to OK but certainly NOT growth stocks at all. I’m not anti Telsa or Amazon but they have been shellacked and so far not showing signs of an emanate turn around.
My point is when the market is poor, why try to make it something that it isn’t? Why push on a rope? I like the Wind At My Back and I’m OK with not trying to pick a bottom in the markets. There will come a time when it will be a lower risk to enter and then I’ll phase in my positions, but right now I’m holding Cash. One last thing: beware of Bear market rallies. They are designed to suck in the unsuspecting and are usually driven by short covering and not sustained institutional buying. Remember, it takes a 100% return to make up for a 50% loss. Have a good week. ……….. Tom ………….. Chart by www.StockCharts.com; used with permission.