Chuck Self on Stock Market 2015: “…3rd Quarter earnings will be fine…”

Posted on: 08/25/2015

“Stay the course and be patient…” is the best thing to do during a turbulent moment and it’s worked throughout history. “Stocks are still up sharply over the last 6 years. The bull market rally began in March of 2009. The S&P 500 is still up 187% since then — a huge rally. In that context, the 8% decline we’ve seen this year is a tiny squiggle on an otherwise upward line.” -Yahoo Finance

iSectors

According to iSectors’ Chief Investment Officer, Chuck Self, investors (sometimes) forget how closed the US economy is and for every firm hurt by what (was and still) is going on in foreign markets and oil prices, there is more than one firm that is helped.

“We think 3rd Quarter earnings will be fine (except for oil and industrial metals).  The Fed is likely off the table until December and market interest rates are headed towards short-term lows.  All of this is good for stocks, which are getting closer to average valuations.”

According to Self, the one thing that has been missing from many of the analyses is the move up in precious metals and precious metals stocks.  Platinum and gold stocks were the two best Dow Jones industries last week.

“You will recall that gold prices fell about 20% from July 1 to October 31 in 2008 while stocks were being massacred.  Gold is up almost 6% for month to date.  It seems that comparisons to 2008 are premature.”

Upon watching the historic stock market decline yesterday, it should also be mentioned that our long-term Treasury bond positions are up:

  • TLT – iShares 20+ Year Treasury Bond ETF (8% in Growth; 22% in Moderate):  +4.4% month to date
  • UBT – ProShares Ultra 20+ Year Treasury (4% in Growth):  +9.1 month to date

 



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