All four major indices started off the week in rally mode on Monday and into Tuesday but it was next to impossible to determine what meaning that may have had. What happened according to media pundits, was that the election did not become a drawn out affair which would have created instability within the markets and the country, but instead as the last ballots were counted people could begin to hone in on the fiscal cliff issue.
What also didn't help on Wednesday was that European headlines were back on the front page with rioting tin Greece and Mario Dragi making comments about concerns within Germany.
You can expect from here on out since we are through the bulk of earnings season, that the fiscal cliff topic as well as the EU mess is what will drive headlines and market benchmarks. It's really too hard to handicap right now which way the cards will fall with the US fiscal cliff issue. Right now there appears to be a willingness between the two parties to work together but you just never know.
Because of this we remain very cautious of both situations even though our buy list is growing very long at the moment. We have stayed patient over the last few weeks as the markets have declined waiting to see any signs of stability before putting new capital to work. This is the tight rope that you walk waiting to see if things turn around before missing out on current opportunities.
All four major equity benchmarks finished lower this week making it the fifth week in a row that indices have finished lower or barely finished in the black. The same is true for the DWCM Fund which finished down for the 7th week in a row. Talk about a bad streak.
Our YTD return is still above 20% which in most cases is more than double the return of the four equity benchmarks. We are constantly looking for new opportunities to build upon our YTD gains but as we mentioned previously we are being very cautious. We are still carrying a 50% cash position which has limited some of the losses that we might have already incurred. Remember the first goal in our fund is to achieve an absolute return. First and foremost we want to preserve capital and then look at beating the four equity benchmarks which is our second goal.
Remember we are not market timers trying to be all in or all out of the market at once. We follow strategies that will help build client wealth and capital for the long-term.
The Week Ahead
Markets are closed in Monday in the US in observance of Veterans Day. It goes with saying that many of us would not be able to do what we do on a daily basis without the sacrifices of those and their families who have served in our armed forces. We thank them and appreciate those that continue to protect our freedoms.
The rest of the week has trinkets of economic data being released. However most if not all of the market activity will be driven by fiscal cliff and EU talk. Beware, further volatility to the upside or downside is likely.
- Mon - US markets closed
- Tue - NFIB Small Business Optimism Index
- Wed - Producer Price Index, Retail Sales, Business Inventories
- Thu - Consumer Price Index, Jobless Claims, Empire State Mfg Survey, Philadelphia Fed Survey
- Fri - Industrial Production, E-Commerce Retail Sales
Have a Great Week!
DreamWorks Capital Management
If you are currently trying to develop your own investment plan or are seeking the help of a professional investment advisor we urge you to give us the opportunity to show you what DWCM can do for you. No matter what stage in life you are currently at, DWCM can help you plan for your ever changing needs.
DWCM can you help you with any of the steps in your wealth management journey including;
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- Looking at various investment options
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