Asset Allocation: U.S. View
Asset allocation adjustments will move assets to undervalued areas and away from overvalued areas based on the degree of over/under valuation. The further the distance current valuations are above fair value, the lower the allocation will be for the asset area from market neutral. The further distance current valuations are below fair value, the higher the allocation will be for the asset area from market neutral.
Stock: Consideration Change Report: U.S.
Numerous BUY considerations have moved back to fair value as prices advance.
Stock: Consideration Change Report: U.S.
More stocks move to SELL WATCH consideration category.
Stock Fair Value Report: U.S.
If the market allows stocks to ‘catch-up” to future expectations, the current market expansion could continue for many years. However, if corporations start to disappoint and expectations start to adjust downward, market growth rates could slow or possibly turn negative. Much of this depends upon the degree of disappointment. The degree of disappointment could be triggered by inflation.
Economic: U.S. – Consumer Credit
Consumer credit is as old as human history but, Adam Smith (1723-1790) mostly dismissed the idea because he never thought it would be popular. Benjamin Franklin observed in Poor Richard’s Almanack that staying out of debt was desirable but, not always practiced, “the People heard it and approved the Doctrine, and immediately practiced the contrary”. Most early economists never believed consumer credit would have a major impact on global economies.