Turn off your TV and enjoy your family, friends & some turkey!

Dear Mr. Market:

When it comes to the stock market it’s easy to see the road we just traveled; what’s more difficult is trying to assess and figure out where we’re going. In last quarter’s newsletter from My Portfolio Guide, LLC we put out a fairly bold prediction of the S&P 500 hitting 5,000 and the Dow Jones reaching 40,000 within the next year. Also included in that edition of “the Guide” (click here to view it if you haven’t already), we discussed some common behavioral biases that we’re all vulnerable to. As we head into Thanksgiving and then the last month of the year, the fear levels are beginning to mount again. There’s plenty to worry about, such as inflation, and speaking of that, it’s sort of like your in-laws visiting….They arrive earlier than you expected and stay longer than you’d like!

While we’re not telling people to be 100% into equities…it’s becoming more and more clear that for the foreseeable future there is no better horse to ride. We’re going to call this proverbial horse “Tina” and share why in a moment. Sure, our gold hedge is not providing instant riches but remember that is not why we bought it. Additionally, we’re seeing more and more people buying crypto as the “new gold” yet most can’t even explain what it actually is. We’d prefer to see Tom Brady pitching Subway sandwiches but now he’s doing crypto commercials. Bonds are awful and going nowhere (yet to some degree justified as part of your overall allocation). Cash is still earning “point zero nothing”. Real estate has exploded and bubbled upwards some more but does it feel smart to you to be the highest bidder on a property right now? All this leads us back to our horse TINA… There Is No Alternative.

Do stocks have risk? Of course…but right now you won’t see them crash. There will indeed be volatility and some corrections in the near future but due to a number of very accommodative factors, and a system that cannot afford to see them tank…this is the horse you want to be on for the next several months. The Fed is still very supportive to the economy and far away from tightening. Argue pro or con (as with everything nowadays) but there is a ton of money flowing through the system right now and pent up demand, so even if we (or other entities) get in our way there is too much strength to hold the market back therefore expect it to push higher. What happens after that? First off…never listen to an economist or look further out than 12 months! Secondly, don’t expect anything close to a smooth ride. We think there could be a period of stagflation (slow economic growth with rising unemployment) but it’s honestly futile to try and time the market in advance of that. We estimate almost a full year where TINA is still the horse to be on (within reason folks!).

Before we close this article and the year…here’s a few Thanksgiving Tips to share with regard to the markets and your mindset as well.

  1. Check your portfolio once a month or even quarterly. If you’re looking daily it will become emotional and problematic.
  2. Focusing on a single stock is also the wrong way to go. Look at your overall allocation as the number one factor to watch and manage.
  3. Your plan should be for a lifetime not a day, a week, or quarter. Generic advice perhaps…but far too many people are myopic in this regard and scare themselves out of the market at literally the very worst times.
  4. Turn off your television, computer screens, mobile devices etc. Seriously….unplug for a bit! This is the time to enjoy family, friends, and all of our blessings. One day we’ll write a white paper on how the folks who watch the most media and spend the most screen time perform the worst and worry the most.

Lastly, we think it’s worth sharing a six minute clip that summarizes the near future as best as anyone out there can do. Click here to view the video on who in our opinion is the most rational economist on Wall Street.

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