In a TR Price update to
investors, Alan Levinson TR Price Chief Economist
“…believes that there are hopeful signs (for the economy). First of all, the housing market is beginning to stabilize: Even if it's not contributing much to economic growth, it is no longer actively impeding it. Falling prices for commodities, particularly gas, should also help to boost consumer spending power. Meanwhile, household balance sheets continue to improve as consumers pay off debt, corporate balance sheets remain robust, and the financial sector reins in its excesses…All this progress, Levenson says, provides the U.S. economy with a safeguard against a relapse into recession as well as a base from which it can grow—albeit slowly. If policymakers are able to improve the fiscal situation, the U.S. should, in Levenson's view, have enough momentum ‘to withstand the shocks that come from overseas.’”
“…believes that there are hopeful signs (for the economy). First of all, the housing market is beginning to stabilize: Even if it's not contributing much to economic growth, it is no longer actively impeding it. Falling prices for commodities, particularly gas, should also help to boost consumer spending power. Meanwhile, household balance sheets continue to improve as consumers pay off debt, corporate balance sheets remain robust, and the financial sector reins in its excesses…All this progress, Levenson says, provides the U.S. economy with a safeguard against a relapse into recession as well as a base from which it can grow—albeit slowly. If policymakers are able to improve the fiscal situation, the U.S. should, in Levenson's view, have enough momentum ‘to withstand the shocks that come from overseas.’”
TR Price is a very good mutual
fund company. They have-high performing,
low-cost, no-load funds with more flexibility than Vanguard funds. Vanguard’s funds are generally the lowest
cost, but TR Price is close enough that the difference is not significant for
most investors.
Where could we find
another view from an analyst I respect?
John Hussman, PhD, of course!
HUSSMAN ON THE ECONOMY
“The
chart below presents the global purchasing managers index (PMI), which has now
weakened to levels last seen during the last two recessions.”
HUSSMAN ON EUROPE
“..the Euro is likely to
be pulled apart, and the tensions will probably be greatest across geographic
and socioeconomic fault lines.”
HUSSMAN ON THE MARKET
“As of last week, the
Market Climate for stocks remained among the most negative 0.6% of historical
observations…”
JOHN HUSSMAN'S, comments were taken from his Weekly
Market Commentary, August 6, 2012. Read the commentary at…http://www.hussman.net/
MARKET
Friday the S&P 500
finished up 0.22% to 1406. VIX fell about
4% to 14.75.
NTSM
The
NTSM analysis was again BUY at the close on Friday.
(The
NTSM analysis is designed to call a BUY or SELL at the bottom or top
respectively. For that reason a BUY at
this point is less significant than it would be at a bottom. NTMS can reverse quickly, even after a buy
call.)
With that in mind, I am
mindful that the market will probably retest the 4 June low of 1278 sometime
between now and the end of the year, or perhaps before the election. Europe hasn’t gone away either. There’s a lot of risk in the market even though most
NTSM indicators are positive. Based on past history, I expect a low of 850 on the S&P 500, perhaps in the next few years. If we enter a recession, it could be a lot sooner...but for now, don worry; be happy!...and have a good weekend.
MY INVESTED POSITION
Based on the BUY signal, 6
July, I moved back into the market on 9 July (after the weekend) at S&P 500
1352. I now have a 50% stock allocation
overall. For my age, that is what most
advisors recommend, however, I am normally much more aggressive. I have less invested in stocks now because
there’s a lot of risk. So far this year
NTSM is beating the S&P 500 by a whopping ½% on one trade.
