The Weekly Update 10/27/2023

The Fed Has “Spooked” The Herd

That is about all I have for this scary Halloween weekly update!

If you think this scary October market is different from Octobers before it, just know it is not!

Perhaps the update I wrote in October 2003, yes twenty years ago, “The Wicked Witch is Dead”, (read it here) is worth a review!

Just like back in 2003 we are all spooked by the headlines.  Bottoms are scary now just like all the others before, yet when looked back on from a few years later, “all” and I mean “all” were launch pads for higher highs!

Heck, just last year right about this date the recession that never came was going to doom us all.  The DJIA was at 28,000.  Pretty sure it is now 33,000 (+17.86%) as I write this on October 26, 2023.

Here are a few data points your news source forgot to share with you.

Chart #1 per J.P. Morgan Guide to the Market, 9-30-23, the consumer is 68.30% of our entire economy and we are trending toward all-time highs.

Which translates into higher profits for Corporate America as measured by the S&P 500!

Chart #2   Yes, that is an all-time high for estimated next 12 months of earnings per share.

Chart #3

Okay, Jim, maybe, but Corporate America businesses are going bankrupt right and left. 

No, only the poorly managed are.

Remember over the last 5 years I have been harping on you to not buy bonds, or own bonds? Meaning you would be the buy side of a large company Bill Gates started who was the sell side at 1% for a 50-year maturity.

Recall how the press said Corporate America was taking on too much debt and I was writing “no”, they are brilliant.

Here in Chart #4, we see that “brilliant” quantified as debt coverage rests at all time lows.  This chart is a 35-year snapshot.

This is why we will continue to add lower risk, lower volatility, and best-of-class investments to our client family’s asset allocations.

I’m interested in your thoughts, comments, and observations.  Feel welcome to call, email, or stop by the office and say Hi.

Respectfully,

James O. Lunney, CFP®

CERTIFIED FINANCIAL PLANNER™ Professional  

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.