| | | "And let's not forget the upcoming election. It fits within that time line."
Regardless of the vote, I fear it will result in political violence. I don't care that much who runs the country, as long as the system remains intact, but violence has the potential to threaten the system. (When polled, a substantial percentage from both sides believe that political violence is justified in some situations. Some of those aver a willingness to engage in such violence and have the means to do so.) That would NOT be good for any segment of the market. My apologies if this is too political.
In my own portfolio, I'm continuing along the same path that I have all year. Slowly building a 4%-5% TIPS position, maintaining sector balance with a strong defensive slant (now over 13.5% utilities), and not rushing to put fresh cash into the market. I rolled over a maturing CD that could have been added to stocks, partly to capture the last of the good interest rates (4.75% for 23 months) and partly because I'm not excited about investing at these values.
My brother is closing on a new house within a month, and is working to raise cash. Much of their taxable stock portfolios will be sold off to fund this purchase. We explored a variety of possibilities, and he prefers cashing out (and then rebuilding the savings) to running the leverage of a mortgage. That's partly his personal situation, which is already heavily leveraged to economic strength, and partly our take on the market valuations here.
The economy continues to look decently strong as far as I can tell. Spotty weakness, but it is possible that the aggressive rate cut will address that. I do expect inflation to solidify in the 3%+ range. Only reason it has looked lower recently is that energy prices have come way down, and that is more a temporary cycle. (That is why energy is not included in "core" inflation. It is a very important segment, but fluctuations in energy can override the signal from other segments.) |
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