It seems as though things have changed pretty dramatically since the rough patch in December.
This has actually been one of the best Januarys for stock market performance since 1987.
The U.S. Federal Reserve seems to be less aggressive with interest rate policy after this week. And in our view, that could be a pretty good thing for the markets.
It also looks like corporate earnings are off to a better start than what we were anticipating, and as though businesses are hiring more and more in the U.S., which could be a favorable factor for the U.S. economy.
To wrap it all up, our view is that mutual fund managers may be getting a little bit more aggressive given the economic strength and recent favorable developments in the markets.
The information provided should not be relied upon as investment advice or recommendations, does not constitute a solicitation to buy or sell securities and should not be considered specific legal, investment or tax advice. The information provided does not take into account the specific objectives, financial situation or particular needs of any specific person. Diversification does not ensure a profit or protect against a loss in a declining market. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. Forecasts or projections of investment outcomes in investment plans are estimates only, based upon numerous assumptions about future capital markets returns and economic factors. As estimates, they are imprecise and hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. Investing entails risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time.
Stock market performance for January was in reference to the S&P 500 index. An index is unmanaged, does not reflect management or trading fees, and one cannot invest directly in an index. January’s 2019 S&P 500 index performance being the best since 1987 was in reference to the Stock Trader’s Almanac. Q4 2018 corporate earnings turning out better than what we expected was a statement of opinion and in reference to an internal study. Statements about the Federal Reserve’s interest rate policy was in reference to the Barron’s article titled, “The Fed Rules in the Market’s Favor” by Randall W. Forsyth. Businesses hiring more was in reference to the Barron’s article titled, “The Dow Rises 64 Points After Jobs Rally Fizzles” by Evie Liu. Statements about mutual fund managers getting more aggressive is the opinion of Round, with additional reference to Scott Minerd’s statements about it being the time to consider buying risk assets and Mario Gabelli statements in a CNBC interview on 1/23/2019 (https://www.gabelli.com/corporate/inthenews/?id=24)