Hello reader!

There is no change to our model portfolio at this time. However, it's possible that we have an update mid-week with a model portfolio revision, after the Federal Reserve (FED) meeting.

The final month of the year has unwrapped some sharp pullbacks as the market has shifted into a state of heightened pessimism. Sentiment swings like a pendulum and overreaches at both ends - on the way up and down. In our opinion, the pendulum has swung too far up the arc of pessimism.

Presently, the state of the stock market encourages a more defensive posturing with a higher level of cash in the portfolio. However, after the sharp declines over the month, it may be prudent at this time to learn about the outcome of a key event - the FED meeting. The market slide was triggered by fears of a sharp slowdown in growth following comments from the FED Chairman which suggested a string of ongoing interest rate hikes. Even after the Fed Chairman walked-back those comments on Nov 30, the market has continued to stumble. The China-related trade war is an additional important issue that has unnerved the market. On Dec 19, Wednesday, the FED committee on interest rate policy will release its comments on the state of the economy and its expectations for future interest rate increases, along with a press conference thereafter. If the Federal Reserve in its comments recognizes some tenderness in the state of the US and global economy and a preference towards a more restrained rate hike policy going forward, the stock market can receive a boost. Otherwise, the stock market will continue to remain burdened with heightened fear about interest rates and future economic growth, and the model portfolio may have to shift towards reducing market exposure. 

For any questions, kindly contact us at support@GraycellAdvisors.com or use the Contact form.

Sincerely,
Graycell Advisors

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