Yes, I am pretty much fully invested, but I'm keeping about 15% in cash and near-cash for any opportunities that might arise.
IMO, the eight years of the communist in the White House can be overlooked as far as counting toward an economic recovery. Nothing was happening during the Obongo regime, because he was trying his darnedest to upset the American Free Enterprise System. I look back only as far as Nov 2016 to count my eggs. That was the true beginning of the current Bull Market, and it is not too late to get on board.
This is from June 2016, from my financial adviser Rida Morwa:
The S&P 500 has been rallying over the past 3 months and is almost up 6%. The bulls have been driving the markets and have been challenging the 2100 level for the S&P. The 2100 level is a BIG deal. A close above 2100 keeps the bulls in charge and it would mean that the rally will continue.
What is driving the rally?
Strong economic data coming from the USA:
Retail Sales: Retail sales for April logged the strongest monthly increase since March 2015. Retail sales surged 1.3% in April, led by autos and non-store retailers.
Industrial Production: Industrial production increased by 0.7% in April easily beating consensus expectations, and posting its strongest advance since November 2014.
Housing: Perhaps the most important piece of economic data, sales of new single-family homes in the U.S. recorded strong gains in April rising to the highest monthly pace since early 2008, according to estimates from the Census Bureau and the Department of Housing and Urban Development. Home sales increased by 16.6% on a monthly basis and by 23.8% year-over-year. Sales increased for all regions except the Midwest. The April rate of sales was significantly higher than recent trends and exceeded all expectations (new home sales hit 619,000 units in April, versus the estimated 520,000 units). These results beat even the most optimistic forecast by more than 90,000 units.
I view that home sales are the best indicators for the state of the U.S. economy. In general, people would not buy new homes unless they are feeling more "wealthy" and have a positive sentiment about the economic outlook. Buying a new home is a long-term commitment and most buyers usually finance their purchases through mortgages and count on the stability of their earnings.
Market Outlook
I remain optimistic about the outlook of the U.S. markets, and I believe that 2016 is going to be a solid year. In my opinion, the markets are going to surprise investors by moving much higher, the same as recent economic data surprised most economic analysts. Barring any unforeseen economic or political event, I believe that the S&P 500 will reach a new all-time high in 2016 and is likely to close the year much higher than yesterday's level. The best course of action for the time being is to remain invested and not to listen to all the bearish noise which seems to have multiplied in the last month. There will always be bears around, and one day their time will come, but I do not think it is anytime soon. The good news is that the bears have kept many investors on the sidelines, away from the equities markets. This money is bound to come back and support the current prices. Most retail investors tend to jump in when it is too late. The way up for the S&P 500 is by all means not going to be a straight line. As long as U.S. and global economic fundamentals remain in favor of equity markets, any short-term volatility will create new opportunities for investors to add to existing positions.
Macro-economic analysis is key to successful investing
A successful investment strategy entails following long-term trends and seeks to capitalize on them. Global economic indicators are the main drivers for the stock markets and they tend to determine whether we are heading into a bull market or a bear market. Therefore I tend to place a lot of weight on the general economic conditions to determine where the markets are likely to be heading. While a large market pullback is always possible, it is unlikely that the U.S. will experience any recession soon, and therefore the risk of any bear market in the current environment is pretty slim.
"All that the South has ever desired was that the Union, as established by our forefathers, should be preserved, and that the government, as originally organized, should be administered in purity and truth." – Robert E. Lee
