We could have had it all
Rolling in the deep
You had my heart inside of your hands
And you played it
To the beat
Rolling in the deep
You had my heart inside of your hands
And you played it
To the beat
Treading Water:
By this Valentine's day the S&P 500 was up 5% ... it's still up 5%. So for the last five months we've treaded water. Well, more like treading water with weights strapped to your waist causing you to sink to the bottom, and then push violently to the surface, breath, sink, rise, repeat. Plus 5% is still plus 5%.
The big issues are still with us:
-The great European deleveraging and austerity. Will they be able to hold the Euro together?
-The US budget crisis. Will they be able to agree on a package that reduces deficits without reducing growth?
-The US economy. Will we find a way to reduce unemployment?
My short answers are No, No, and Maybe.
Longer answers (but not too long). Certain countries in Europe (PIIGS) will default, and some may leave the Euro. We will eventually see a new Euro structure, not sure what form it will take. The simple fact is that there is too much debt to be serviced with too little growth.
A compromise on raising the debt ceiling will be reached, it won't be enough to address the nation's long-term debt issues. Politicians will put off doing anything substantive until after the 2012 election.
The Fed will keep rates at zero and do everything possible to encourage corporations to put money to work. It may or may not be enough. Corporations have been growing nicely, but most of their investments/growth have been overseas.
In summary, investors will have to kick hard, bounce off the bottom, fight and struggle for every basis point they can get.
Where We Stand:
Recently we lowered our International Bond exposure to neutral, and increased Gold Miners to Neutral.
US Equities -- 12% Neutral,
stocks are bouncing back and forth with little direction.
Int'l Equities -- 12%
Neutral, but clearly in a down-trend.
US REITs -- 6%
Bullish, but showing some signs of tiredness.
Int'l REITs -- 3% Neutral
.
Gold -- 9% Bullish, clearly being viewed as a fiat currency substitute. Gold miners are neutral.
Commodities -- 7% Neutral, with a lot of sideways action
.
US Fixed Income -- 18% Bullish, with the Fed all but guaranteeing that rates will be kept low. US debt downgrade could be wild-card.
Int'l Fixed Income -- 10.5% Neutral, but risk has increased with the European bank problems.
Cash Equivalents & Currencies -- 22.5%, divided between US, China, Australia, and Brazil.
Enjoy this brief video adaptation of "Casey at the Bat".