Conclusions for 2018
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| We believe we are in a Topping Market and prepared a special study to explain why. We wanted to give some ideas of what we will try to do. |
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Hold high quality bonds where appropriate:
- Since 1926, Government bonds have advanced 5% annually in the years stock prices fell.
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Lower equity levels:
- Asset class diversification historically provides better capital preservation in down markets.
- Active risk management is often beneficial.
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Lower holdings in e-commerce and other high flying, expensive stocks:
- E-commerce stocks show signs of being in a bubble. Historically, the aftermath of bubbles has been unpleasant.
- Valuation measures have been ignored for a long period of time. We believe a change is likely and may last for years.
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Focus equity holdings on bargain securities – measured by valuation, earnings and price momentum:
- Bargain stocks had been lagging expensive stocks, this appears to be reversing.
- Historically, bargain stocks have held up better in challenging markets than expensive stocks.
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International investing holds some opportunities:
- While international stocks often move in correlation to U.S. equities, valuation levels and the economic cycle favor some international markets.
- We see reasonable opportunities in some Euro-zone countries: India, South Korea, Vietnam, Peru and Chile.
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Disclosure
This information is of a general nature and does not constitute financial advice. It does not take into account your individual financial situation, objectives or needs, and should not be relied upon as a substitute for financial or other professional advice to assess, among other things, whether any such information is appropriate for you and/or applicable to your particular circumstances. In addition, this does not constitute an offer to sell, or the solicitation of an offer to buy, any financial product, service or program. The information contained herein is based on public information we believe to be reliable, but its accuracy is not guaranteed.
Investing involves risks, including loss of principal.
Past performance is no guarantee of future results.
ALPS Distributors, Inc. 1290 Broadway, Ste. 1100, Denver, CO 80203 (Member FINRA). ALPS is not affiliated with James Investment Research, Inc.
*Quantitative Tightening is a course of action undertaken by the Federal Reserve to constrict spending in an economy that is seen to be growing too quickly or to curb inflation when it is rising too fast. *Yield Curve Spread is a metric bond investors use when gauging the level of expense for a bond or group of bonds. *Price-to-Sales ratio is an indicator of the value placed on each dollar of a company's sales or revenue. *Cryptocurrency is a digital or virtual currency that uses cryptography for security.
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