Market Trends & Outlook

Consumers have already begun making decisions based on higher prices. There will be big winners and losers which makes stock picking a very important portfolio position for the next 12-24 months. Not every company is well suited for the environment we are in, and the most relevant brands will be taking market share. That’s where our team is focused from a stock selection perspective.

Jerome Powell isn’t Paul Volker, and this isn’t 1982. As of late, market analysts are stumbling all over themselves, trying to outdo each other on the “why this time is different” related to the Federal Reserve’s ongoing inflation fight. One of the more interesting comparisons came from the always uber-bullish Tom Lee of FundStrat.

Jerome Powell isn’t Paul Volker, and this isn’t 1982. As of late, market analysts are stumbling all over themselves, trying to outdo each other on the “why this time is different” related to the Federal Reserve’s ongoing inflation fight. One of the more interesting comparisons came from the always uber-bullish Tom Lee of FundStrat.

Long-term returns are unsustainable. I realize that is a bold statement that flies in the face of mainstream analysis. How often have you seen the following chart presented by an advisor suggesting if you had invested 120 years ago, you would have obtained a 10% annualized return?

Long-term returns are unsustainable. I realize that is a bold statement that flies in the face of mainstream analysis. How often have you seen the following chart presented by an advisor suggesting if you had invested 120 years ago, you would have obtained a 10% annualized return?

Markets shook off the 2022 doldrums in July, with every income-oriented asset category tracked by HANDLS In-dexes gaining positive returns. MLPs rebounded from a dismal June to return 12.7% for the month of July, bring-ing year-to-date return to 23.5%. With the Utilities category gaining 5.4% in July to bring its year-to-date returns to 5.0%, MLPs and Utilities are the only categories to have earned positive year-to-date returns through July.

Of course, such sentiment is not surprising given that over the last decade, investors have repeatedly been beaten into submission to buy stocks when the Federal Reserve is easing monetary policy. Such was a point we discussed in “Pavlov’s Dogs & The Ringing Of The Bell:”

In an environment set up to be a lost decade for many traditional asset classes, a potentially compelling option is moving from a 60/40 to a 50/30/20 portfolio allocation model to integrate a fund like the Catalyst/Millburn Hedge Strategy Fund (MBXIX), which has generated positive returns in both bull and bear markets.