The Weekly Update 9/20/2024
Right after valuations did that cliff dive the first week of August (2024), I saw this on Dr. Ed Yardeni’s website:
“Insider buying perked up considerably in last week’s market weakness. Excluding faux insiders (or money managers considered insiders simply because of large position size), actual managers and directors were significant buyers. Overall volume picked up, as did purchase size. There was especially large and actionable buying in cyclical industries: Technology, construction engineering, retail, banking, home building supplies, mortgage finance and cruise lines.”
By definition, these are the people who have hundreds of floors of MBA’s, CPA’s and attorneys advising them. They are buying.
On the flip side, Mr. & Mrs. 401(k) behaved by selling another $50.34 billion in equity mutual funds. Per The Investment Company Institute (ICI) Fund Flow Report dated 8-28-2024, here is the 2024 YTD Fund Flow:
1/03/2024 –1/31/2024 outflow - $46.64 billion
1/31/2024 – 2/28/2024 outflow - $48.76 billion
2/28/2024 – 3/27/2024 outflow - $43.08 billion
4/03/2024 – 4/24/2024 outflow - $44.16 billion
4/24/2024 – 5/22/2024 outflow - $35.15 billion
5/22/2024 – 6/18/2024 outflow - $49.312 billion
6/18/2024 – 7/24/2024 outflow - $66.725 billion
7/24/2024 – 8/21/2024 outflow - $50.34 billion
Our view? Volatility is not a secret when it comes to August, September and October. This is normal! and with market values at another all-time high. Yet reasonably valued, clearly more money is flowing into the ownership of Corporate America than is flowing out. Expect that to continue!
I did not say market valuations go straight up, and I did not say without volatility, yet the data flow suggests the good old USA is just waking up from the post Covid hangover. The outlook is that this could be a 10 ticket ride up the net worth curve.
Don’t fret, panic or worry if the “normal” back and fill comes knocking. It will not be as scary as the business news will tell you. Instead, I think the knocking will be an opportunity and here at TWSG, we will pounce on that, for now just pray that it comes!
At TWSG, we are well allocated for this and have our well thought out Investment Selection Matrix™, investment menu working in our collective TWSG 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.
All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested in directly. The economic forecasts set forth in this material may not develop as predicted and there can be no guarantee that strategies promoted will be successful. Stock investing includes risks, including fluctuating prices and loss of principal.
Asset allocation does not ensure a profit or protect against a loss. Value investments can perform differently from the market as a whole. They can remain undervalued by the market for long periods of time.