Other than the market rallying past some arbitrary round number, I'll never understand the media's obsession with passing a particular milestone. The number itself has no relation to value if not thought about from the context of earnings. Simply put, the market at any indiscriminate number may be overvalued or undervalued just as purchasing a stock at $1 dollar may be expensive while purchasing another at $10,000 may be cheap. These milestones do however bring out the Bear and Bull pundits touting that stocks are now certain to "plummet back to earth" or hyping some new ridiculously high number such as Dow 50,000. Both predictions are generally self-serving and work only to garner the so-called "experts" tv time and to shill for their new book or the financial products which they are selling.
We remain cautiously optimistic for a continued economic recovery though also positioned underweight equities due to valuation - particularly in the U.S. - as we have written in previous quarterly commentaries. That said, we continue to find value and will patiently wait for opportunities when they present themselves. We have no crystal ball and wouldn't endeavor to predict the next recession and/or bear market. Instead, we remain content to invest in companies for the long term while patiently collecting income from the dividends and interest to reinvest in distressed issues or to fund the retirement income needs of our clients and investors.
During this festive season, we are thankful for the trust our clients and investors have placed in our firm to manage their assets and assist with their wealth management needs. We would like to wish you and your family a season filled with peace and joy and a happy, healthy and prosperous New Year.
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