The S&P 500 Index (SPX) and Dow Jones Industrial Average (DJIA) continue to perform well. In my opinion, the reasons include some bond money going into equity and lots of money still in the money market. The longer term trend is still up but, in my opinion, a 4% to 7% pullback in stock prices may be just around the corner.
We are long the S&P 500 and we like precious metals and technology.
My analysis indicates that all style boxes have positive momentum. Though I have no hard evidence to support this, my theory is that the best sectors are precious metals, financials, utilities, and then oil. The semiconductor sector is in a down trend.
In my opinion, the strongest international equity markets are: Germany, England, and then emerging markets.
DISCLAIMER: The investments discussed are held in client accounts as of October 31, 2013. These investments may or may not be currently held in client accounts. The reader should not assume that any investments identified were or will be profitable or that any investment recommendations or investment decisions we make in the future will be profitable. Past performance is no guarantee of future results.
