{"id":431,"date":"2014-10-24T17:37:00","date_gmt":"2014-10-24T17:37:00","guid":{"rendered":"https:\/\/401advisor.com\/?p=431"},"modified":"2021-10-06T17:40:17","modified_gmt":"2021-10-06T17:40:17","slug":"market-update","status":"publish","type":"post","link":"https:\/\/401advisor.com\/?p=431","title":{"rendered":"Market update"},"content":{"rendered":"\n
\"Money<\/a><\/figure><\/div>\n\n\n\n

The stock market has had a five week \u201ccorrection\u201d followed by a one week recovery \u2013 that recouped 70% of the corrections losses. While sentiment has seemingly shifted from an extreme doom and gloom outlook over the past few weeks, statistically the stock market retests its lows about 67% of the time. Meaning we will likely give up this week\u2019s gains.<\/p>\n\n\n\n

aWhile I remain cautious, we did buy a couple of holdings for our portfolios this week. Notably P&G for our dividend strategies. P&G is THE dividend aristocrat based on its history of paying a dividend every year since the mid 1890\u2019s (that\u2019s not a typo!). P&G just hasn\u2019t been cheap enough to meet my criteria. Yesterday I gave in and took a position across our dividend portfolios. P&G released earnings this morning and we were rewarded with a 3% gain in early morning trading.<\/p>\n\n\n\n

Our growth portfolios are also seeing changes. We will focus more on individual stocks as we rotate into the \u201cBuy in October\u201d seasonal strategy.<\/p>\n\n\n\n

I\u2019ve also added an article on the bond market that was published yesterday at horsesmouth.com<\/a>. The main takeaways are 1. While the stock market can\u2019t decide if the economy is too strong (meaning the Fed will start raising interest rates) or too cool (economy drops to recessionary levels) the bond market seems pretty convinced that the economy will continue in the \u201cjust about right\u201d pace. And 2.  Even if the Fed raises short term rates, longer term rates aren\u2019t likely to keep pace. While the economy is growing it is too soft to support a sharp rise in long term interest rates. While Fed action could spark a recession it is likey  4- 5 years out. My caveat to that is Europe. Major European bank failures will roil our market and economy. PDF:  Horsesmouth _ Bonds<\/a><\/p>\n\n\n\n

The take away is this. Many advisors are recommending clients move into short term bonds as a defensive move against rising rates. However, the bond market is telling us that intermediate bonds \u2013 in the 8 \u2013 10 year maturity range may actually be affected less if the Fed starts to raise short term rates.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The stock market has had a five week \u201ccorrection\u201d followed by a one week recovery \u2013 that recouped 70% of the corrections losses. While sentiment has seemingly shifted from an extreme doom and gloom outlook over the past few weeks, statistically the stock market retests its lows about 67% of the time. Meaning we will […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[13,6,9,7],"tags":[],"class_list":["post-431","post","type-post","status-publish","format-standard","hentry","category-dividends","category-investing","category-money-management","category-stocks"],"_links":{"self":[{"href":"https:\/\/401advisor.com\/index.php?rest_route=\/wp\/v2\/posts\/431","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/401advisor.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/401advisor.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/401advisor.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/401advisor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=431"}],"version-history":[{"count":0,"href":"https:\/\/401advisor.com\/index.php?rest_route=\/wp\/v2\/posts\/431\/revisions"}],"wp:attachment":[{"href":"https:\/\/401advisor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/401advisor.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/401advisor.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}