Very obviously, we love it when we ring the bell and the stock market immediately responds with a resounding rally...but that is not our goal. We, along with our Asset Allocation Model, are believers that our financial well-being is not a function of the daily oscillations that come and go. But instead, we are long-term investors, with a minimum time frame of 6 months. But more realistically, we have an optimum time frame of 1 to 2 years. So, it is extremely important for our perspective to be aligned with that goal.
As you know, our Asset Allocation Model made an important change on Monday morning suggesting that the S&P 500 could move up drastically over the next 18 months. This suggestion, of course, was brought to us by the combination of our Psychology, Monetary, and Valuation Composites. With Monetary and Valuation in their most bullish positions (of M1 and V1) and Psychology moving to P4 (a more neutral position compared to the prior rating of P5), our allocation matrix suggested that we be fully-invested in equities. We explained this in more detail in yesterday's video, so be sure to check it out.
So, despite wars and unrest, commodity speculation that is runnning wild, an economic slowdown, the political mess surrounding the deficit, and a threat of a Greek default, our visual of the stock market today, in a very oppposite tone, is much brighter than what the headlines are suggesting.
If you didn't get the chance to view our latest video update yesterday, be sure to check it out here.
To read today's complete Market Comment, click here.
Please see important disclosures at the bottom of this page.