Will the Coming of Fall Cause a Fall?

Labor Day has passed and fall begins. I have been inundated with calls about unusual concerns on what the remainder of 2013 will hold for the markets. Now that Syria has been added to the list with debit ceilings, Bernanke replacement and the “tapering commencement” I am not surprised. We have had a good year if you were invested. With yields still historically low those holding cash have valid concerns. You will be getting your August statements soon and reflected in your performance is a 4.5% correction. As I have repeatedly stated, every year since 1945 we have experienced a 5% to 10% pull back. This one is text book, since it happened in the traditional August swoon.

How should we reason with the above events? These are short term effects not long term conditions. The market has already priced in tapering, does it really matter who the new Fed boss will be, and Syria may turn out to be a positive instead of a negative. The stage is still set for a meaningful rally and the Bull took August just to catch his breath. Bull or Bear is the subject of many of the TV debates, but remember bull markets don’t end until Monetary Liquidity ends. Going from 85 billion of bond purchases by the Fed to 65 billion is still stimulus; no matter how you view it.

Every measurement of market valuation still shows to be “cheap” from a historical perspective. The problem is behavior of the investor which now has gone from the fear of the market being overbought to oversold and afraid to commit.

Therefore, I personally, am still staying with my allocations 75% equities 25% fixed income, and using any downside to add to positions. Of course, your risk appetite will vary based on you goals as it should, but remember I do this for a living and my threshold for fear is very high. Like Kramer says (one of the facts I agree with),  “there is a bull market somewhere.”


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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