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Bull or bear, there is less commitment to either side than Henry VIII on any one of his many marriages. Breathe a wisp of a US jobs recovery like we have this morning (374,000 jobless claims) and the market rallies. Mention Europe (even as a vacation destination) and the market swoons. However, do them both in one morning and the bears win out which is today’s scenario.
The reason commitment is so tenuous is that well thought out cases can be made to buy or sell stocks. We believe the market will ricochet from despair to euphoria throughout the balance of the summer and through the November elections.
A nautically inclined client emailed us, “in choppy seas, stay in the middle of the boat”. We have always believed that diversification by asset class makes sense. We do believe that stocks are your best chance to outpace inflation over the coming decade but only the most steelied nerved and intrepid investors should be 100% invested in equities.