CMW MONTHLY MONEY PULSE™

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January 25, 2019
CMW MONTHLY MONEY PULSE™

This old bull appears to have a bit more run left after seeing him charge out of the gates the first few weeks of 2019.

In fact, as we have touted before, this has been the best January start since 1996.  I bet ya didn’t see that coming after all the dreadful “Are we Headed to a Bear Market?” headlines in December. In fact, prompted by the year-end volatility we thought it appropriate to present a “Bear Market Drill.”  Just like fire drills are practiced BEFORE a fire, we are preparing investors BEFORE a bear market.  Notice we said “BEFORE”?  That’s because we are not in a bear market yet.  A bear market is characterized by a 20% drop in the market that stays down.

If anyone has looked at their statements for the year-end, we’re betting you don’t feel too sure about not being in a bear market, but remember, that statement captured a value on the day it was produced. What did the market do the last couple of weeks in December? Drop! What has the market done since that statement came out?  Soared! In fact, U.S. equities are all up from nearly 5% in Health Care to over 10.5% in Small Growth.

Well, how much longer can this bull last? It’s getting kind of old, right?  Yes, in fact if this “Teflon Bull” continues to charge until March 9th this year, it will celebrate it’s 11th birthday. Let’s take this opportunity to reiterate that old age doesn’t kill a bull market. Here are some signs to look for towards the end of a bull market:

  • When no one is worried. Fear is still quite rampant
  • When optimism is everywhere – Your cousin Lenny, who would never invest in the market EVER calls and tells you about a great investment and insists you do the same
  • The optimism turns to greed. A frenzy hits the market, everyone is all in wanting to get their piece of the gains.
  • When the yield curve actually inverts AND the media is not reporting on it.

Why are the above-mentioned points a sign of a bear market? Think of a bull, charging and charging ahead.  Every investor jumping in the market is another little weight on it’s back. When investors are fearful, there aren’t many weights on the bull.  Then investors get optimistic, more and more jump in and weigh the bull down. He may shake some of those off with a correction.  But then when optimism turns to greed, it’s a frenzy and the bull gets more and more weighed down, he overheats (the market skyrockets like the bull’s temperature) and finally he falls. He can’t hold up any longer – he needs a nap. But we know he will wake back up, ready to charge again.


There’s no doubt this bull has quite the wall of worry to climb.  Expect continued volatility for 2019.  But hang in there – if necessary for your sanity turn off the news – all of it radio, TV, SeriusXM, social media, anything mentioning the market. And, most importantly, CALL US if you need reassurance.

Peace of mind is of the utmost importance – all the time.

Indexes are listed in respective order to their reference above: DJ Industrial Average TR USD; S&P 500 TR. These materials have been prepared solely for informational purposes based upon data generally available to the public from sources believed to be reliable. All performance references are to benchmark indexes. Performance of specific funds will vary from respective benchmarks. Past performance is not an assurance of future results. Each index cited is provided to illustrate market trends for various asset classes. It is not possible to invest directly in an index.