We have arrived at the last month of the year, with Christmas and the New Year just around the corner.  The chilly weather has begun and I sure hope we don’t experience another cold and damp one like last year.  Have you finished your gift shopping yet (have you started)?  I am happy to say I have begun the process and, hopefully, I won’t wait until the last minute to finish.

News on the economic front has been improving a little for the past month and the technical analysts we utilize have become more positive for the intermediate term.  They think we will probably see stock market values generally increase for the next few months.  Last week seems to have been the end of the recent correction and we have had several days of strong gains in the world markets.  The following are comments from Peter Mauthe who is one of the technical people we follow.  I thought you might find his comments from last weekend interesting.

This past week the S&P500 continued its consolidation after failing to get through resistance at 1220.  The consolidation has not been sufficient to drive either the MACD or the Rate of Change indicators back below their respective Zero Lines.  Therefore, this consolidation should be considered as being within the confines of an intermediate term up trend.

The consolidation we are going through now is orderly and likely to end soon.  Korea is a problem.  Several European countries are a problem.  The American economy is a problem.  We will never be problem free.  What we do in America is solve problems and adapt to changing circumstances.  So I am optimistic that given time we will figure out our challenges better than most and the market, as always will follow a different path than the press thinks it should.  For now that path, at least on an intermediate term basis is up.

Since this year’s stock market low point at the end in June, we have seen an overall gain in value for the year.  Our domestic stock market didn’t get back out of the RED ink until September.  In keeping with our very cautious approach to the extreme volatility we have been experiencing for the past 3 years, we waited until we had a clearer perspective of the potential market trends before moving back into stocks.  This has, of course, put us temporarily in a lagging position, but we have been gaining ground nicely and I am confident we will end the year with a reasonable profit in our portfolios.

Over the past 10 plus years, we have experienced similar short term lagging results only to come back with excellent performance for the longer-term periods.  Our 10-year performance results are still far better than the S&P 500 Index.  I see every reason to believe we will do the same in this situation possibly even better.  Of course, I am required to remind you that past performance is no guarantee of future results, but you already knew that anyway!

We wish you a wonderful holiday season and hope you will be able to join us on December 14th for our annual luncheon at the Sarasota Yacht Club.  As always, feel free to call me if you would like to chat.