It's here, and I'm delighted. As far as investments go, the last 63 months - since September 2007 - have redefined the investing public into a herd of shadow watchers scared of every echo. Don't get me wrong, the 2007-2008 financial collapse had all the makings of a Great Depression rebirth. If the massive cushion of cash had not been installed, the economy would have frozen totally. The ONLY entity that was willing to provide this cash was the Fed, so contrary to popular thesis, long live the Fed.
But that was 2008, and this is (can you believe it) 2013. The old song says "another year older and deeper in debt," but that is not the way this year is starting out. You may think so if you are listening to the news and watching the "Fiscal Cliff" soap opera, but the truth is that the consumer now has the lowest monthly debt service of any time in the last 10 years and corporations are floating in cash with their best balance sheets in decades.
This year has all the makings of a very good year. It is a HUGE transitional year. Many of the transitions are going to be tough on the Baby Boomers, as the Millennial Generation starts putting their personality on politics, tax policy, and every other walk of life. But as we emerge from the 2007 to 2012 constant calamity, this is the year that I'm strongly hoping the Fear Index (price of gold), that has been so dominant since 9/11 starts to show a relaxation of fear and a much more normal international economic stability.
And as we begin this new year, here's where our Asset Allocation Model stands.
As you can see above, much like we've seen the past few months, our model continues to sit in a position of short-term caution (Psychology at P4), with long-term expectations (out 12 months) being positive (Valuation and Monetary in the "green" zone).
So today...let's relax and enjoy it.
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