Last week, the market was not kind to stocks. It may be nothing worse than trading closing positions before leaving on vacation, but it seems that people are more reluctant to own stocks. At the same time, interest rates rose, reflecting lower demand for bonds. It’s not a very fun time to be in the markets.
Only US stocks, large cap and small cap, have positive momentum, but it is declining after a negative week. Last week, I decided to sell my ETF of European stocks (XIN), since it was no longer working. Because no other asset class seems poised to rise, I instead bought an individual stock (MG) and I’m really glad about that.
It’s hard to get excited about the economic outlook. Interest rates remain low, debt remains high, governments seem intent on creating more debt and corporations seem hesitant to spend. At the same time, it’s been five years (just about) since the last market crash… which seem to happen every 4-7 years. It’s hard to imagine what could happen in the next year or two to improve the fortunes of stocks and, by extension, investors who “buy & hold” broad market indices (or mutual funds).