What's the FIRST question investors should ask themselves and have a clear and concrete answer to before putting money in the market?
It is literally step one. The cornerstone of any strategy or trading plan...
What is my objective?
Every investor should examine this thoughtfully and keep it top of mind to ensure that their investment decisions are aligned with their investmentgoals.
Usually, the answer is pretty simple and comes down to maximizing returns, or more importantly minimizing losses, in a way that fits within each individual's unique preferences.
But as we'll explore in this post, this isn't always the case, and sometimes it can be a bit nuanced - as is the case with Environmental, Social, and Governance investment strategies.
So as an exercise let's put ourselves in the shoes of ESG investors and ask a few simple questions...
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
The market continues to fire on all cylinders right now. Last week's gains were nothing but a continuation of the same resiliency and momentum we've come to expect from risk assets over the last year.
From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
Markets never operate in a static manner. Instead, markets are dynamic and remain in a natural and constant state of flux.
In knowing this, we must always remain flexible and aware of the changing conditions and developments taking place around us. We pride ourselves on our ability to evolve and adapt to these changes in market structure and are never dogmatic in our approach.
For the last decade, US large-cap growth has been where the alpha is, and derivatives of this theme like large over small, stocks over commodities, and US over international have been very powerful relative trends. We know this well because we've been leaning on them for a long time...
Last week's mystery chart was a popular one, so we inverted it to make things a bit more challenging. Someone still guessed it... Nice work.
It was the iShares 7-10 Year Treasury Bond ETF $IEF. The issue with inverting Bond charts is that when you do they look identical to yields. In the case of IEF, we're basically dealing with the US 10-Year Yield $TNX.
Rising rates has been one of the main themes early this year as developed market yields have accelerated higher and hit the pockets of bond investors all over the world.
In this post, we'll check in on some of the most important and most telling credit instruments on both absolute and relative terms in order to piece together the message the bond market is sending investors.
At the beginning of each week, we publish performance tables for a variety of different asset classes and categories along with commentary on each.
Looking at the past helps put the future into context. In this post, we review the absolute and relative trends at play and preview some of the things we’re watching to profit in the weeks and months ahead.
Rotation into value is dominating the narrative right now as money continues to pour out of the former leaders and into long-term secular laggards like Financials and Energy.
In line with this trend, we continue to focus less on US Large-Caps and Growth, and instead look for opportunities in SMIDs, Cyclicals, and International stocks.
There's nothing like a good bubble popping to throw a wrench in everyone's plans.
The passive investor bubble popped. They're getting smoked and I think it only gets exponentially worse for them moving forward.
The U.S. home country bias is a bad one too. That one looks like it popped and about to get a whole lot worse for people who think the United States and The World are the same thing.
Bonds going up for 40 years? That's normal right? It's too early to call a generational turn. We can't make that call until 10s are holding above 3%. But it sure looks like that was it.
Meanwhile, the "Lack of Commodity Exposure" bubble is very apparent. I got in this business back in the day and was taught that there were 3 asset classes: Stocks Bonds & Commodities.
Commodities have done so poorly for so long that people just forgot it was an asset class. Is there a better landscape for a change in trend than after completely being eliminated from asset class status?
From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley.
The US Dollar is one of the most important pieces of the intermarket puzzle.
It affects all the major asset classes, and a rising dollar could impact the current market environment by creating a headwind for stocks and suppressing commodity-centric and cyclical areas of the market.
This could put pressure on our current market thesis as US Dollar strength has the potential to put a damper on the recent rally in risk assets.
In this post, we'll take a look at what's going on underneath the surface in the US Dollar Index by running through some of it's largest components.
We'll then weigh the evidence in front of us in an effort to determine a directional bias for King Dollar.
From the desk of Steve Strazza @Sstrazza and Ian Culley @IanCulley.
We held our March Monthly Strategy Session last night which Premium Members can access and rewatch here.
In this post, we’ll provide a summary of the call by highlighting three of the most important charts and topics we covered along with commentary on each.
Intermarket analysis is always an area of focus over here at All Star Charts. Right now, there are a lot of changes taking hold beneath the surface in some key cross-asset relationships.
For the longest time, the alpha has been in the US... it's been in large-caps... and it's been in growth stocks. That's been the playbook. We know because we've been running it back for years now.
Although, we're seeing strong evidence that this is no longer the case...
One of the best things about our approach is that it allows us to be incredibly flexible and adjust our views as new data becomes available.
We pride ourselves on never being dogmatic. Speaking of which, despite how much we've leaned on secular leadership from growth and tech stocks in recent years, the data is suggesting we reposition ourselves in favor of Value (read more about it, here).