(Early) Weekly Comment - March 5, 2018

Mar 02, 2018 | Nick Foglietta


Know what you are going to do in your investment portfolio no matter what transpires in coming months and years.

Plan Your Investment Strategy Before Markets Make their Moves

The purpose of this weekly communication is to encourage you to prepare yourself to know what you are going to do in your investment portfolio no matter what transpires in coming months and years.

This comment is meant to be considered in concert with the past two weekly comments as a summation, so let’s begin.

Nobody knows what is going to happen in the future.

All day long people offer opinions based in logic and reason based upon what they see happening in their field of interest--this is true of sports, business and even our lives--nobody knows.

What the modeling I do is attempting to harness, is the depth of that statement and then act in a logical manner given the fact that nobody knows the future.

In summary, I look for trends that are in place and stay invested in those trends. At the same time I watch those trends to see when they are changing trying to decide where a sensible exit or entry point is.
In essence, we are letting the trend show us what to do.

Below is a chart of the TSX Comp Index for the past 3 years.

Please take note of two characteristics on this chart.

  1. The TSX has not gained much in total value in the past 3 years. This lack of performance comes during a time when interest rates were crushed down to zero and monetary conditions were “easy.”
  2. The light blue box is signaling he potential for the TSX to make a “lower low” where the rally that started on February 8th fails and the TSX falls to below 15,000.

The next chart is an inset of the blue box.

For the TSX, my models are holding on to all of our core investments that pay dividends. To add money back into the TSX dividend paying names one of two scenarios shown above must occur:

  1. The TSX Comp must regain its 200 day moving average. (The flat blue line at 15601 on the chart.
  2. The TSX must drop below 15000 and then rise above it again.

What are alternative investment options to look at in the present situation?

I believe that depends upon you and your needs and goals. Please feel free to call me and we can set a time to discuss.

Paul Tudor Jones on the US Markets

Below is one of the most descriptive anecdotes I have ever read about the financial markets. Paul Tudor Jones is a legend. As stated above, nobody knows what is going to happen next, but he is an opinion worth listening to and weighing.

The excerpt included here encompasses the theme of his article. What PTJ is writing about is how challenging it is going to be for the new US Federal Reserve Chairman, Jerome Powell, to navigate monetary policy under the financial and political conditions of today.

Graphic to be sure; hard to argue with though.