Stocks ended last week down slightly after more signs emerged that inflation may be starting to abate.
www.investing.com/analysis/price-check-inflation-optimism-and-stocks-rise-after-mild-ppi-report-200632400
We are holding onto stocks because the current market rally may have a little further to run.
seekingalpha.com/article/4559395-will-we-see-blow-off-top-for-stocks
However, we do not expect this bear market to be over. The $SPX500 may fall to the low 3000s next year, possibly as early as Q1.
www.marketwatch.com/story/the-s-p-500-can-get-to-4-150-before-reality-sets-in-says-morgan-stanleys-normally-bearish-top-strategist-11667213242
To be more confident that a sustainable market trough has been reached, we would like to see lower valuations and a reversal in leading economic indicators. At the moment, leading indicators look rather depressing, predicting a very weak economy in 2023.
www.oecd.org/sdd/leading-indicators/composite-leading-indicators-cli-oecd-november-2022.htm
www.advisorperspectives.com/dshort/updates/2022/11/18/cb-lei-currently-in-a-recession
On a longer-run horizon, on the other hand, we remain bulls. Value stocks ($VTV) are expected to return 4-11% a year after inflation over the next 10 years. Value stocks can thus be expected to comfortably beat Growth stocks ($VUG) and bonds ($LQD $HYG), whose returns should average around 2% a year.
interactive.researchaffiliates.com/asset-allocation
Patient investing in Value stocks will be rewarded, in our view.
𝟮𝟬𝟮𝟮 𝗽𝗲𝗿𝗳𝗼𝗿𝗺𝗮𝗻𝗰𝗲 𝗬𝗧𝗗
@triangulacapital -1.2%
$SWDA.L -16.4%
𝗣𝗼𝗿𝘁𝗳𝗼𝗹𝗶𝗼 𝗰𝗵𝗮𝗻𝗴𝗲𝘀
None.
