Don’t Chase This Bull Market — Participate In It
February 16, 2017
By Resnick Advisors
Please don’t refer to the present market upturn as “The Trump Rally!” It is actually a rally built on a solid foundation supported by:
- Removal of the uncertainty of “who will be president?”
- The breadth of the new global expansion – there are very few countries in the world showing negative growth.
- Strong corporate earnings growth – which is true justification for rising share prices.
- The strong employment picture.
- Rising wages.
- Very positive consumer sentiment.
- Low interest rates.
Vis a vis the above positives, there are also negatives:
- Uncertainty with respect to tax cuts.
- Reassessment of trade agreements.
- Prospect of reduction of burdensome regulations (which might not happen).
- Questions about the U.K. and other turmoil within the E.U.
- Persistent problems in the Middle East.
Given an environment with so many strong positives burdened with potential negatives, the single best defense against unacceptable downside volatility is your asset allocation. Once again, and we are hoping not to appear redundant, your allocation must provide the satisfaction that you will participate in a share of the upside as well as allow you to accept the downside. Your asset allocation should be something you can live with in both environments.
As always, we would be happy to discuss any of this with anyone who would like to give us a call or send us an e-mail – firstname.lastname@example.org.