Market updates are typically not planned during the month. However, in what is becoming a pattern during the fourth quarter, the unrelenting volatility in stocks is forcing a constant reevaluation.
At this time, 2 positions will be closed in the model portfolio to reduce the market exposure to 70% from 90%. The 2 positions are:
- TRVG
- CROX
Even good stocks can struggle in a bad market. Thus far, the Correction related volatility of downside and upside moves has been similar to the ones experienced in the past few years. As the market once again approaches the bottom of its range in a zig-zag pattern, it will provide new insights on whether it can once again reverse and move higher or not. Further risk reduction may be required during the month.
There is a fog of concerns that has rolled-in which is beginning to cloud the investment visibility. Earnings concerns for 2019 and the anxiety of an over-active monetary policy are legitimate concerns. But the market sentiment has transformed to a point where most news is being perceived as bad news or in other words a glass-half-full sentiment. Consumer spending remains strong, the employment market remains strong, and the Federal Reserve has indicated it is now closer to achieving a neutral threshold where further policy action, or interest rate hikes, may not even be required in the first quarter of next year. But the negative sentiment dominates for the time being, and this market condition will require patience to resolve.
We will continue to monitor and make any further adjustments to the model portfolio during the month if required.
For any questions, kindly contact us at support@GraycellAdvisors.com or use the Contact form.
Sincerely,
Graycell Advisors