The first quarter of 2018 has reminded investors that there is indeed risks associated with investing. There have now been two 10% declines in the S&P 500 since February, and many of our signals suggest that we will remain in a period of elevated risks through mid-year.
With this issue, we are beginning to publish a chartbook during the first few weeks of each quarter. This provides us the opportunity to include thoughts (and charts…we love us some charts) so we can quickly go over multiple areas of the economy and financial markets that we don’t get to in our normal Insights format. Our comments are limited, and we hope the pictures do the talking.
The Chartbook is divided into five Sections:
- Fixed Income
- Other Assets
- Investment Strategy
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In this issue we address the Investor’s Dilemma. Most major asset classes offer historically low return expectations given the levels of risk. Equities, corporate bonds and US Treasury bonds are all expensive by most measures, long in their historical cycles, and are all showing extremes in bullish sentiment.
We have continued to position clients defensively with high cash levels. However, in the past few days we have received buy signals for the first time in over 6 weeks.
We hope you enjoy the chartbook. Invest wisely.