12:00 TUESDAY – Investing Insights #254 – 02/04/25

by Robert Holman, CFA CFP | www.DefensiveAdvisor.com

STOCK MARKET RATING (THE BIG PICTURE) … 6.0 (1 - 4 is bearish, 5 is neutral, 6 - 9 is bullish). Election enthusiasm, while still present, is waning. Democratic leaders have begun a resistance campaign attempting to halt or delay changes taking place.

The market is somewhat schizophrenic. Big down days filled with worries over tariffs, international tensions, and inflation, are followed by rebound days when there is no confirmation of such fears.

Recent tariffs against Mexico and Canada, rather than bringing inflation, resulted in promises of conciliatory actions, which delayed the tax briefly, pending accountability over negotiated promises.

Economic theory says that tariffs are inflationary, while actual experience shows tariffs producing periods of substantial economic growth. Go with experience over theory. Expect the up-down price pattern to continue.

In “fully valued” markets, one where business conditions are generally good and growth is either moderate or slow, time spent searching out-of-favor groups that may benefit from an economic or policy change of some sort, is often a great route to achieving excess returns.

While I acknowledge the higher risks, with earnings increasing, and prices volatile, some down days will be good buying opportunities.

I stand ready to reverse course should conditions deteriorate unexpectedly. I’m staying slightly bullish. I’m avoiding making new commitments, except in new accounts, unless I'm re-investing proceeds of closed positions. I’ve got a few stocks I’m interested in buying under such conditions.

PORTFOLIOS … After reading this report, if you are unsure how to respond to these conditions, you may send a message to my Secure Email and I’ll reply with the information you need. I’ll also give you a free portfolio assessment, see the link below.

TO MY CLIENTS … THANK YOU FOR YOUR TRUST.

LEARN FROM THE BIBLE … Proverbs 15:22 MSG - Refuse good advice and watch your plans fail; take good counsel and watch them succeed.

This report is a 2-3 minute read, published every other Tuesday afternoon. To sign up for this bi-weekly e-Newsletter, or to get a free portfolio assessment, go to: http://www.defensiveadvisor.com/blog.

Opinions in this post are for general information only and are not intended to provide specific advice to, or recommendations for, any individual without our complete knowledge of that individual’s total financial profile. No strategy assures success or protects against loss. Nor does past performance guarantee future results.