| By :
Brian Fricke
Copyright (c) 2010 Brian Fricke It seemed like the markets started off 2010 very similar to last year. Not quite as stressed out, but January and February were not, shall we say, stellar in terms of market performance. And then in March things came roaring back with a vengeance. So of course the big question now is, “Will the up trend continue?” It’s amazing what has transpired over the course of a year. We’ve gone from the deepest darkest days in recent market history to quite a significant rebound. It just goes to show you — the market does what it wants to do. We currently have money invested in three broad categories. US, International, commodities and currency – and in that order, that’s how performance for the quarter kind of stacked up. The US markets did better than international, which did better than commodities and currency. But they all made money! Just about every individual position that we put in client accounts is showing profits for the quarter. More importantly, they are showing performance better than their overall market index or benchmarks. If we would have had 100% of monies allocated to the US, performance would have been stronger — frankly a lot of that had to do with the strengthening of the US Dollar, which is good for US stocks but hampers performance of international stock. We’re not ready to make any significant allocation changes as far as getting out of international, currency or commodity holdings. We’ll just wait and see and follow our supply and demand investing system, which has served us quite well over time. We have more confidence than ever in our supply and demand investment system. It got the stress test of all stress tests in 2008. It helped us get out of the market in 2008. Yes, we put some money back into the market too soon. We were concerned that the extreme volatility in the market back then would have caused false readings with our investment system indicators, but with hindsight benefiting us, we’ve seen that in fact our supply and demand system is quite robust and resilient. So we have more confidence now than ever before with our investment system. It certainly helped us navigate through last year. It told us to start putting money back into the market rather aggressively in March of 2009 — and that’s at a point when things looked their bleakest as far as market performance. I find it interesting that over a year ago the media was all over market performance. While recently, the media has been, at least to me, somewhat quiet. I was expecting all kinds of news reports when we closed out the first quarter showing the recovery in the market — for US Stocks this was one of the strongest quarters in the last decade and I really haven’t seen any media reports picking up on that. To me, that’s just tangible evidence that the media in general still prefers negative news over positive news. In a nutshell, the market is still showing strength across the board. US, International, Commodities are all still showing strength, still telling us we want to have money invested in those areas. We aren’t seeing any weakness now. If anything we’re showing an increase in strength and demand. We don’t have a crystal ball — well we do but it’s as cracked and cloudy as everyone else’s. The bottom line, we’ve got a system and strategy in place should market conditions change, holding by holding, we’ll take the necessary action to protect profits, keep losses to a minimum and avoid the roller coaster ride so many people experienced in 2008.
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