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Strong Upward Movement in the Stock Markets

QUOTE OF THE WEEK

“Nurture your mind with great thoughts.  To believe in the heroic makes heroes.”

  • Benjamin Disraeli

TECH CORNER

Last week there has been a strong upward movement in the stock markets. With the economic data progressively getting worse, this rally is what can be considered a short bear market rally. This type of market movement to the upside is normal during a bear market. These moves are often short a sharp to the upside.

If you look at the chart of the S&P 500 from July of this year, what you see is a series of lower highs and lower lows. The trend of lower highs and lower lows is consistent with a bear market. On the other side, if we were in a bull market you would see higher highs and higher lows.

We have all the signs of a recession coming, if we are not already in a recession and not yet know it. We are seeing manufacturing declining, unemployment claims rising, and the start of credit spreads rising.

In the managed accounts we are positioned in Money Market and short-term Treasuries. In the variable annuities we are positioned in intermediate high quality bond portfolios. Over the last week or so we have seen a steady drop in interest rates. This has been good for our portfolios. Remember when interest rates decline bond values go up. We don’t yet know if this drop in interest rates is a trend. When we see a trend established in dropping interest rates, we will increase the bond duration to take advantage.

For now, we are playing it safe.

If you have friends or family in need of financial life planning services,

It would be the honor of Laurence Lof Financial Advisors to assist them.

We value your referrals!

These are Larry Lof’s opinions and not necessarily those of Cambridge, are for informational purposes only and should not be construed or acted upon as individualized investment advice. Past performance is not indicative of future results. Due to our compliance review process, delayed dissemination of this commentary occurs.

The S&P 500 index of stocks compiled by Standard & Poor’s, a division of The McGraw-Hill Companies, Inc. The Index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Indices mentioned are unmanaged and cannot be invested into directly.

Technical analysis represents an observation of past performance and trend, and past performance and trend are no guarantee of future performance, price, or trend. The price movements within capital markets cannot be guaranteed and always remain uncertain. The allocation discussed herein is not designed based on the individual needs of any one specific client or investor. In other words, it is not a customized strategy designed on the specific financial circumstances of the client. Please consult an advisor to discuss your individual situation before making any investments decision. Investing in securities involves risk of loss. Further, depending on the different types of investments, there may be varying degrees of risk including loss of original principal.

Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Laurence Lof Financial Advisors, LLC are not affiliated. Laurence Lof Financial Advisors 4757 E Camp Lowell Drive Tucson AZ 85712 info@lofadvisors.com

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State Disclosure: Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SPIC. Investment advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Lof Laurence Lof Financial Advisors, LLC are not affiliated. Investment products and services available only to residents of: Arizona (AZ), California (CA), Colorado (CO), Florida (FL), Idaho (ID), Indiana (IN), Michigan (MI), Massachusetts (MA), Minnesota (MN), Montana (MT), North Carolina (NC), North Dakota (ND), New Mexico (NM), Oregon (OR), Ohio (OH), Pennsylvania (PA), Texas (TX), Virginia (VA), Wisconsin (Wl), Wyoming (WY). We are licensed to sell insurance products in the following states of: Arizona (AZ), California (CA), Colorado (CO), Florida (FL), Idaho (ID), Indiana (IN), Michigan (MI), Montana (MT), North Dakota (ND), New Mexico (NM), Oregon (OR), Pennsylvania (PA), Virginia (VA), Wisconsin (Wl).
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