What Could Change Our Stance?

Lately our communications have focused on the fact that we are still bullish over the intermediate term, and are using current volatility in the markets to augment risk assets in our portfolios. With that in mind, it is important to note that we are not complacent here, and realize that if conditions continue to deteriorate, there is a possibility that the dislocation in Europe could infect growth across the globe. As investors learned during the last downturn, countries are more interlinked than ever these days, and I certainly don’t think that any country can decouple should a major economic power begin to falter.

So I’m sure readers are wondering what sorts of data points we are watching that might factor into a change in stance. To make a change in our cyclical market view (as opposed to forecasting a correction within a bull market) it usually takes a wide cross section of data points (macro economic, technical, value, change in independent analyst views, etc). However, there are certain data points that we are focusing on very intently given current market conditions. The table below is a brief scratch list of some of the more important things that the team is watching closely right now.

For now, we continue to invest a bullish view based largely on continued economic expansion. But views can and do change, and we will continue to keep an open mind based on how the evidence builds in the many data points we follow. After a monster rally off the lows, and hitting the lower end of our target range, it is no time to be entrenched in any one view at this time.