Extra Innings

We believe the right way to invest is with a diversity of opinions. Here are examples of three different opinions.

Recently, the economy may have received a shot in the arm from the Fed. As this investment manager puts it, “the expansion gets extra innings.” The opinions here are detailed, but informative. Suffice it to say, these are good times:

https://www.thecapitalideas.com/articles/outlook/us-outlook

From another point of view, this market looks normal:

https://www.athenainvest.com/behavioral-markets-summary

Our researchers at Athena Invest show Normal to Good economic activity, higher-than-average valuations, and mostly normal technical indicators. They show “Caution” in their patented approach to looking at small companies in the USA—but show all things otherwise as normal or excellent. So, this unemotional, data-driven approach says turn off the television and the internet news, and enjoy your summer.

A third opinion, from Jeffrey Gundlach at Doubleline Funds, is bearish. He predicts a 65% probability of a recession within a year. I cannot find the “original recording” (talk about an oxymoron!) on the Doubleline website, so I’ll use this link to a source that is, at least recent:

https://marketrealist.com/2019/06/why-jeffrey-gundlach-thinks-the-stock-market-has-peaked/

Mr. Gundlach puts a 65% probability on his prediction—giving himself plenty of leeway in case we go into even more innings. Mr. Gundlach is famous for finding ways to make the mundane dramatic. Bad news sells, and the article captures the negativity but not the humility; none of us knows the future. When I’ve met Mr. Gundlach in person, he’s much more humble than the Henny Penny this story makes him out to be.

Realize, of course, that bad news sells. Writing is work prone to making the writer grumpy, and pessimism is easier than optimism to muster. So, all the qualifications are in place, the warnings are many, and long-term investors will be rewarded over a long time period—not a short one—for tuning out all of it.

If you feel like you want to act, then call your wealth manager. Because you’ve got a much longer time horizon than a two-minute (at most) soundbite, or five-minute (diversion) read, and these decisions have a very large impact on the person you’re becoming.

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