The Return of the Nervous Nellies

An old indicator of market sentiment has surfaced again. For many years I have used what I named the Nervous Nellie behavioral gauge. I have received several phone calls from my seasoned clients worried about the market. Everything from let’s lock in capital gains to let’s just get out and get back in next year have been discussed. I am not oblivious to these concerns but my question to the Nellies is what do you see in the future that is giving you this feeling? When you think about it that is a hard question to answer because when you turn off the news and look at the real economy there are a lot more positives than negatives. However what they fear is the fiscal cliff which from my view point is more noise than effect on portfolios.

I was listening to the Presidents news conference today and through the market responded negatively what I heard is more comments about finding common ground. Any solution will spark a rally because what the market is concerned about now is no solution. It is a buyer’s strike waiting for some sort of decision to come forth. The market is suffering from uncertainty not the economy. If it was the economy then why did one of the largest chip makers post the best earnings for the past five years? The fear indicator the VIX is still below 18 when even in normal markets the low twenties is comfortable. For a big crash to come it should be around 30.

The market is sending Obama a loud signal to lead and come to an agreement and the Republicans need to also listen. Mr. President you got reelected to solve problems not create them so do your job.


About billriley

Chief Executive Officer, Chief Compliance Officer A co-founder and shareholder, William Riley is a 33 year industry veteran, who observed, many years ago, that over time institutional investors typically outperform individual investors while accepting less risk. In his role as Chief Executive Officer, Bill works tirelessly to make the wealth management strategies used by the world’s wealthiest families and largest institutions available to our firm’s individual clients. Bill combines fundamental and technical analysis to minimize investment portfolio risk and maximize potential returns. He uses a variety of non-correlated asset classes, including alternative investments, to minimize portfolio volatility and seek absolute returns in down or flat markets. Finally, Bill believes in a comprehensive approach to wealth management that fully coordinates and seamlessly integrates portfolio management, risk management and asset protection, trust, estate, tax and charitable planning. Prior to co-founding Riley Wealth Management ,LLC, Bill held management positions at Merrill Lynch, UBS, Raymond James, Paine Webber and J.C. Bradford. Bill founded Fort Worth branches for Raymond James and J.C. Bradford. Prior to entering the financial services industry, Bill ran his families closely held businesses. Bill’s experience operating family businesses combined with his wealth management experience makes him uniquely qualified to advise entrepreneurs and business owners on a variety of matters including complex and sensitive issues relating to business succession. Bill’s degrees and designations included a Masters Degree in Business Administration (MBA), the Chartered Financial Consultant designation (ChFC), the Chartered Life Underwriter designation (CLU) and the Wealth Management Specialist designation (WMS). A Fort Worth native, Bill is a TCU alum and active in many civic and charitable organizations. Bill and his wife, Marsha, now reside in Colleyville, and they have four grown children and four grandchildren. When he is not working on portfolios or studying financial markets, Bill can be found on the golf courses of Ridglea Country Club.
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