Our Point
After a blockbuster week of news last week, this week has been staid and quiet. As we mentioned last week, we expected the market to pull back a little and it did just that. The pullback was very mild and short-lived and buying has returned today. If things stay where they are currently, the S&P will have its first down week in the last six – albeit a very small loss. It has been quite a run and we don’t believe it is over. There have been no shortage of acronyms to mark this market environment. TINA (There Is No Alternative) and FOMO (Fear Of Missing Out) are two of the most prominent ones. While not a big fan of trendy acronyms, there is no denying the reality of them. With interest rates as low as they have been for several years, bonds and other interest-bearing instruments cannot keep up with the cost of living. The rapid increase in inflation has only exacerbated the issue. Investors that would ordinarily be more conservative have been forced into the markets to try and generate some type of return. There is no alternative and the stock market indices have been the beneficiary. Similarly, FOMO has caused many investors to throw caution to the wind and simply jump into the markets with little fear or consideration of the risks. The market indices have again been the beneficiary. Neither TINA or FOMO are long-term investing strategies, but we believe they will continue to push the markets higher in the short-term. At some point, the acronyms will give way to more sensible markets. However, we are not at that point. As long as the Fed stays accommodative, and Congress continues to pass trillion-dollar bills, the path of least resistance for the market is up. When that stops there will be problems – big problems – but that is the subject of an upcoming market note. Of course, any number of things could come up that could roil the markets though none are currently apparent. For now, enjoy the ride while it lasts. We have continued to fine tune our portfolios this week as we exchanged a few investments for ones that are better suited for the current environment. We are fully invested in a mix of equities and low-volatility funds and will continue to make changes as market conditions warrant. We have a big weekend planned as my youngest is closing on her first house today, the Vols try to survive against Georgia and the Titans try to keep their hot streak alive. It will be a full weekend and I hope yours is equally exciting.
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Bills Asset Management (“BAM”), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from BAM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. BAM is neither a law firm, nor a certified public accounting firm, and no portion of the newsletter content should be construed as legal or accounting advice. A copy of BAM’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at www.billsasset.com.
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About Bo Bills
Founder and Chief Investment Officer at Bills Asset Management. With over 30 years of experience in managed risk investing, Bo has helped countless clients achieve their financial goals while preserving capital.
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