Our Point
With markets closed tomorrow due to Good Friday, we are issuing an abbreviated note early. The markets pulled back modestly this week. The decline was enough to work off some of the overbought condition of the market. If the uptrend resumes next week, we will respond with a few investment purchases. We remain cautious and do believe that any short-term rise in the market will likely be met with selling in the coming weeks. However, there may be a tradeable rally to make money in the interim. The first quarter of 2023 was a good one on paper. However, a look beneath the surface tells another story. For example, the top 10 stocks of the 100 in the Nasdaq 100 accounted for 88% of its gains this year. Similarly, 15 of the 500 stocks in the S&P 500 accounted for all of its market cap gains for the first quarter. The remaining 485 were down for the quarter. The rise in the indices are being driven by a very small number of stocks. It is not a broad-based rally so any weakness in a few market leading stocks could lead to a significant decline in the market. Despite this, we will be tempted to buy index-based investments should the rally continue. There are also interesting developments in some of the bond markets (municipal bonds have our attention currently). Tomorrow brings the monthly jobs report which always has the potential to be a market mover. We made no changes in our holdings this week and will spend some of this weekend parsing through charts to determine opportunities that have good risk/reward prospects. Enjoy the Masters and have a great Easter weekend.
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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