December 1, 2019

The markets rose to new highs throughout the month of November.

The combination of a neutral/accommodative Fed and a better global growth outlook for 2020 were the key factors in the euphoria, but the other factors were the seasonal strength and a belief that a China deal on tariffs will eventually be signed. There are more positive signs as the White House signaled once again that the signing of the first part of the trade deal was close.

Although everybody seems to think that FOMO [Fear of Missing Out] will cause institutional players to buy, buy, buy into the end of the year, there is the ever-present retrenchment that the market goes through regardless of good news.

Generally, this euphoria would be great if we were coming off a big sell-off, but we’re not. The major indexes are at new highs as is the advance/decline line. Put it all together, and the market may soon reach a point where it is overbought.

By rebalancing portfolios periodically and keeping cash available for known upcoming expenses, we can control unwanted selling in a down market and mitigate most unexpected surprises. Well-balanced quality portfolios weather the anticipated and unanticipated fluctuations that we always experience in the equities markets.

The Dow, S&P 500 and the NASDAQ are positive year to date at 20.25, 25.30 and 30.60 percent, respectively, with the 10-year Treasury yielding 1.77 percent.

Please accept our best wishes for you, your family and friends for a Merry Christmas and Happy New Year.

*Disclaimer: This report is a publication of Marchand Faries Financial Management, Inc. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed.  All expressions of opinion reflect the judgement of the author as of the date of publication and are subject to change.