Not a love affair, just asset allocation decisions
Townhall Takeaways for December 8
Townhall Takeaways podcast:
Bull markets get going when bulls break out. The NAAIM exposure index and the bull-bear spreads from the AAII and II surveys remain below their August highs. The behavior of the II bull-bear spread as the S&P 500 struggles for traction is reminiscent of 2016. Back then it took an increase in bulls to have a bull market. Now is likely no different.
Harmony with the trend is more important than love for an asset class. Commodities are 2 years into a relative uptrend versus stocks after showing no leadership for decade. Commodities have been ignored as an asset class for so long that they have been largely forgotten. But zooming out we see that leadership moves back and forth between stocks and commodities. Leaning in the direction of the relative trend would have have helped increase portfolio returns AND reduced portfolio volatility. Love the trend not the asset class.
Global stocks are taking the lead. The longest sustained stretch ever of US stock market dominance relative to EAFE has come to an end. Non-US Developed markets are poised to lead the way into the new year as global equity leadership moves overseas. This is an early contender for 2023 chart of the year.
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