The 2nd quarter of 2013 was not as good as the 1st. As I regularly say, “Trees don’t grow to the sky”; and with the volatility experienced in the past quarter the markets struggled to show a gain. But what is really important here is the fact that the 1st quarter gains were what we usually what we hope for in one year. Fixed income took it on the chin due to the good news on the economy and the expectations that Bernanke was raising rates as soon as the news conference ended. Since we hold very little Treasuries, I felt we would be insulated from possible rising rates. However, the skittish bond vigilantes marked down the price on anything that had a yield.
What investors have overlooked the S&P small caps. They are now outperforming the majors and this will give more support to the bulls as this plays out. I am also seeing improvement is the foreign markets; with one of my indicators, the World Bullish Percent, turning positive last night changing the downward direction which has lasted for about 24 months. This will also add to the bullish sentiment.
My main message is to focus on what is really happening not the opinions of “experts” who think they know what is going to happen. The main focus is to observe what the real economy is doing not headlines and the fear mongers are telling you.
Please contact me if you would like to go over your statements before I have a chance to contact you.