While there are many corny analogies (and this one is no different), I find that these analogies help me to place some context around a general abstract profession. In the example above, I show a simple relationship between stocks and bonds. When the line is heading up, stocks are outperforming bonds and visa versa. Think of this like a dance between two asset classes. Like on the dance floor, either you or your partner is leading. You BOTH cannot be leading. Not only do I want to own leaders, but also look for interesting turning points that could yield additional information. I would observe in the graph above that stocks have been in a bear market since early 2014, only to recently emerge late last year. My observation is that stocks took a big breather to digest the very large gains from 2013. It looks like to me stocks are ready to Paso Doble higher at the expense of bonds.
¡Olé!,
P. Franklin, Jr.
May 4th, 2017
All opinions and estimates included in this communication constitute the author’s judgment as of the date of this report and are subject to change without notice. This communication is for informational purposes only. It is not intended as an offer or solicitation with respect to the purchase or sale of any security. This information is subject to change at any time, based on market and other conditions. Any forward looking statements are just opinions – not a statement of fact.
Investing may involve risk including loss of principal. Investment returns, particularly over shorter time periods are highly dependent on trends in the various investment markets. Past performance does not guarantee future results.