CMW MONTHLY MONEY PULSE™

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March 29, 2018
CMW MONTHLY MONEY PULSE™

It’s déjà vu all over again in the markets!

Yogi Berra, who coined this famous phrase, was quite the observer of human nature and life in general. And when it comes to observing and gauging the market, the longer we look, the more this theme appears to play out. What goes up must come down. However, with the market over the long term trending up 6-10% (most 5-10 year rolling periods), it may be more accurate to say that what goes down will eventually come back up again.

Of course, we’re not talking about individual securities. We’re talking about the market in general or indexes representing large buckets of securities. Many mutual funds and most exchange traded funds (ETF’s) are generally based on indexes. More to the point, we’re talking about globally diversified accounts using these types of vehicles as do we at CMW.

So, coming to the end of this month and the first quarter of 2018, what does déjà vu mean for our money? Pretty much what we saw a month ago about this time. Since then, the market nearly recovered from its February correction before heading right back to the same pit to stage its comeback over less than two weeks.

And from January forward, this is exactly what we encouraged investors to brace for in 2018. We also encourage investors to keep their eye on the ball which is the US and global economy. These both look better today going forward than they did last year through the end of 2018, and during this first quarter up to the present.

Of all 14 most recent global Leading Economic Indicators (LEI), all but two reported level or positive. This includes the overall Europe LEI and the Global LEI. Regarding the US index the Conference Board’s Ataman Ozyildirim noted, “The LEI points to robust economic growth throughout 2018. Its six-month growth rate has not been this high since the first quarter of 2011…The business environment for this year and next still looks bright, especially because the labor market created more than 200,000 jobs per month over the past six months.”

With the S & P 500 poised to end the day, the week (and potentially the month) up, a great deal of volatility can still add up to positive returns. That’s because volatility goes in both directions. It is human nature to discount the ups and amplify the downs in the midst of those swings, especially when they are crowded together over short periods. That’s why we describe this experience as a roller coaster.

As we write, we wouldn’t rule out the possibility of the entire first quarter ending in positive territory. In that context, after a year like 2017, that’s pretty darn good. So pay little attention to the daily grind of the market media and keep your eyes fixed on the economy for this year. We think prospects are good and suggest you’ll be much happier than most of your investing peers. Have a Happy Easter and great weekend!

Indexes are listed in respective order to their reference above: 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. 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.